23 Apr 2020

Disability employer Altus' redundancy package: a story with no winners

4:14 pm on 23 April 2020

This is a story with no winners.

Martin Wylie with workers in the Altus Enterprises factory in Papatoetoe

Altus Enterprises chief executive Martin Wylie with workers at the Papatoetoe factory. Photo: Social Enterprise Auckland

Margaret's* disabled brother has been working at Auckland's Altus Enterprises - which has employed about 200 people, most with some kind of health issue - for many years.

He's being made redundant along with 136 other people. It's a nightmare.

Altus' chief executive Martin Wylie has been at Altus for five years. He joined because it was a social enterprise doing good. The work helps people feel valued and gives them a purpose.

The company's catchphrase is "business with a heart".

He's heartbroken too.

Margaret and Martin are two sides of the same coin. They both desperately want a better result.

Altus has been running for more than 50 years. Since 1986 a large chunk of its business has been with Air New Zealand. In the last year, the airline represented about 60 percent of Altus' revenue.

Staff, mostly paid under $4 an hour (well below the minimum wage thanks to a special government dispensation), were refurbishing more than 20,000 headsets a day for international flights.

That is what Margaret's brother spent most of his time doing. The pay, which helped top up his support benefit, was only about $73 weekly for the days worked - but it was about more than just the money.

"It was a big part of his life, for meaning and purpose and the socialisation. They were a community, his community. It was awesome. It was out of this world," she says.

"It is devastating. Suddenly they have all been wiped out."

She says staff will not even get to say goodbye to each other because the restructuring process was launched on 23 March, the day the level 3 lockdown was announced with immediate effect, just days before level 4.

"They all want to stay. Many have said they will volunteer - do things for nothing. It means that much to them."

Margaret says she does not understand why the business has not applied for the wage subsidy for the staff being made redundant.

"I think it completely contradicts the company's slogan."

She is also angry Air New Zealand's government bailout of $900m has not filtered down to people who really need it.

A testimonial from Air NZ to the workers on the Altus site says:

"Partnering with organisations like Altus allows us to focus on our competitive advantage.

"The Altus team has been doing an incredible job ... Altus continues to deliver for us and we are very happy with the relationship."

Air New Zealand planes parked up at Auckland Airport during the Covid-19 pandemic.

Air New Zealand has grounded large numbers of planes due to travel restrictions from the Covid-19 coronavirus and ensuing plummeting demand for air travel. Photo: Supplied / Air New Zealand

Today, it said it was "proud to play a part in supporting people who might not otherwise be employed, and of the great work they carry out for us".

"Unfortunately, at this time the work Altus has been contracted to do as a supplier to the airline is not required due to the impact of Covid-19 on the aviation industry and our international network.

"As and when demand for travel begins to ramp up again, our arrangement with Altus will resume."

'Never in my worst nightmare'

Martin says there were some issues prior to the lockdown. Late last year he started seeing a downturn in business from Air NZ. They were reducing orders and concerned about costs.

While the staff are paid little, because of the disabilities involved many are often needed to do a task one person might normally manage.

Martin speaks warmly of the relationship with Air NZ, saying they hosted Christmas parties for the staff and tours of its facilities.

"We were very happy to have the work. Large volume work which is manual like that is very hard to come by. We needed them and they needed us. We worked well together."

On a cost basis they were still below cost and "desperate" for the work to continue.

Martin is trying his best to comprehend the scale of what he is doing and the impact.

"This is the worst thing I have ever had to do. Never in my worst nightmare did I think I would have to make 137 disabled people redundant.

"They are absolutely dedicated to it... many of them are heartbroken. This is the centre of their lives. Some of the letters I have received... the loss to 'Johnny' and those families. He doesn't understand why he can't get up in the morning, get on the bus and go to work... he wants something to do all day.

"Some of these people have been with us for 20-30 years and trying to explain to them - there is no way to explain they haven't done anything wrong. This isn't their fault."

The feedback, published in the final decision confirming the redundancies, lays bare how people are feeling. They thank the company for its support and comment on the value it has added to their loved ones' lives:

"The day xx was employed by Altus he phoned with excitement and pride which he expressed as 'having a proper job where he signed an Employment Contract and contributed to Society'. His pride has never wavered over the past xx years of employment. His confidence and personal growth has benefited greatly....and he has been able to articulate to me about how his life was without purpose, and the dark times and difficulties he has faced with fortitude and humour.

"We do ask that you consider our son for redeployment into other areas of your operation. With training, we know that he will be a loyal employee and this would give him purpose and something to look forward to each day."

"Just saying that I love my job and it keeps me going and the money helps a lot. I know I have worked in headsets for a couple of years but I can learn new jobs if it has been shown to me and I am a quick learner."

'I don't want to pretend people have a job'

Martin says his team's sole focus in recent months has been trying to diversify what they do, including growing its Will&Able eco cleaning product range, but the onset of Covid-19 was so fast.

"The problem fundamentally is not about cost but the moment the lockdown was announced the orders just stopped. Even if we could keep people on there is nothing to do."

The business thought hard about applying for the subsidy before starting the redundancies but Martin says it was not the honest thing to do. He did not want to mislead people about the situation.

"When you claim the subsidy you have to have a reasonable chance of getting that work back. Of there being work. How in good conscience could we apply for it?"

Margaret thinks here the issue is fundamentally financial and even for three months it would have helped people like her brother, given them some hope.

Martin says you have to be honest with people, no matter the circumstances. The work is not coming back in the next six months, let alone the next 18.

"I have never had so many sleepless nights but I'm clear in my mind that we had no alternatives. To say anything else is demeaning to our people.

"In all honesty, when the subsidy stops there is no job unless the good fairy arrives with 20,000 headsets. In reality there is no way through that at the moment.

"I don't want to pretend people have a job ... this is a real job like yours, a real job for a client which you get paid for doing."

He also had to keep in mind the health and safety implications.

"It's not a financial issue. You could give me the money but I still have 140 disabled people with nothing to do clustered together."

Towards the end they were leaving headsets for three days before processing due to concerns staff with low immunity might be exposed.

Martin has 70 other staff he is trying to keep employed but at the moment enough work for about 20. They are receiving the wage subsidy for them and trying to find new work.

What next?

The redundancy process will be completed in May. This includes helping staff with their CVs, a small number of redeployments, talking with other social enterprises and agencies about work, and final payments.

Martin is not looking for government handouts but hopes the payments don't affect the benefits most of the staff already receive.

He says he would "love nothing more" than to be able to employ everyone again but has to be realistic.

"These are the most challenging group of people to find work for ... if someone out there has work, get in touch with me."

Margaret is worried and realistic too.

"These people will likely never get a job somewhere else."

For now, her brother is stuck at home on lockdown. His community, friends, routine and purpose have been taken away.

Everyone has lost something here.