A History of Suffering: Food giant Talley’s Group underpaid injured workers

Source: 1News

Food manufacturing giant Talley's underpaid workers injured at its factories. Its meat works division AFFCO did the same. The impact for one man was devastating.

Richard Fitness.

When the money ran out, Richard Fitness made sure his dog ate first.

The North Island AFFCO employee was used to going hungry. For months he had been too sore to work, his wages on hold.

His left shoulder, wrecked by a life of hard toil, often kept him awake at night. Even a little movement could lead to agony, the bone slowly wearing away, a reminder of all the time he once spent working a meat saw.

By June 2021 he was in debt, depressed and had just $30 a week for groceries.

But he still made sure his dog Rocky was fed.

"I was too scared to eat, because we don’t know when the next time we were able to buy some food," Fitness, 39, said. "[But] the animals, the animals, you know, it's not their fault they've got to starve."

The Manawatū man isn't the first person to face a desperate situation while working for Talley's Group, the parent company of food manufacturer Talley's and the meat works AFFCO.

Both Talley's and AFFCO have partnerships with ACC, allowing them to manage the care process for their own employees after injuries. It's a significant task: they have thousands of workers across New Zealand between them, with factories from Invercargill to Moerewa producing seafood, meat and vegetables on an enormous scale.

Every year, hundreds of those employees report injuries. But at multiple different times between 2018 and 2021, Talley's Group failed to provide injured workers with basic standards of care.

A seven-month 1News investigation found both Talley's and AFFCO have a history of underpaying employees hurt at their factories.

Correspondence obtained by 1News reveals ACC raised concerns seven times between 2018 and 2020, after both companies failed to take care of staff at their time of need.

At one point in 2020, the regulator found AFFCO was making "consistently inaccurate" payments to meat workers after they were injured on the job.

While both Talley's and AFFCO have passed ACC audits in recent years and been allowed to stay in the programme, 1News has found an underpayment as recently as November 2021.

How the scheme works

The control Talley's and AFFCO have over staff comes from the Accredited Employers' Programme, designed to give private companies the ability to work "in the shoes of ACC".

It gives both companies the power to make their own decisions on ACC claims filed by their employees - they can choose whether to accept or reject workers' applications for compensation following accidents at their factories.

The companies are also financially liable for those injuries and must follow the law and proper procedures. They must rehabilitate injured workers and pay proper weekly compensation, as ACC would.

But correspondence obtained by 1News under the Official Information Act shows ACC has repeatedly had to intervene after the two companies failed to live up to that standard.

'Employees Being Underpaid': History of Failings at Talley's and AFFCO

In a June 2020 letter to Talley's Group management obtained by 1News, an ACC manager outlined several "ongoing performance concerns" at Talley's and AFFCO.

At times, they said, Talley's couldn't prove it even knew how to calculate payments properly.

"There was insufficient evidence to confirm that the organisation had an accurate and repeatable approach to the calculation of weekly compensation," they wrote in the letter. "In particular there were examples of employees being underpaid."

They added that "despite clear expectations and ongoing training", aspects of the group's audit and legislative requirements were "not being consistently met". In other words, it was breaking the law.

The problems were deep-seated. In February 2020 an ACC monitoring report found short-term injury payments were "consistently inaccurate" at AFFCO.

An ACC advisor had to intervene, ordering AFFCO to reassess several files due to "underpayments".

"Files need to be re-assessed and the employee provided back payment," they said at the time.

ACC listed additional training it had to run for the two companies, saying it was yet to see adequate improvement.

Issues included:

  • a failure to meet basic wage compensation and case management requirements in August 2018
  • a need for in-person training on the "critical aspects" of weekly compensation in November 2018
  • ongoing issues with compensation and case management in January 2019, including inaccuracies in the way weekly compensation was calculated
  • a teleconference with the Talley's payroll team to discuss issues with weekly compensation in March 2019, particularly issues in "onshore/offshore scenarios"
  • a failed audit at an AFFCO plant in October 2019, where an independent auditor found "several primary level injury management requirements were not being met"
  • further in-person training to educate Talley's payroll team on "critical aspects of the assessment, calculation and provision of weekly compensation" in November 2019
  • monitoring which found AFFCO was still failing to meet "audit and legislative requirements" in February 2020
  • and "consistently inaccurate" wage compensation payments at AFFCO in February 2020.

Talley's audits show improvement

Talley's Group refused 1News' request for an interview, sending a written statement through its lawyers instead.

Talley's suggested its claims team, known as the Injury Management Unit or IMU, had introduced additional training, compliance and audit initiatives in recent years.

"Since the letter you refer to, Talley's has been extensively audited," the statement said.

"Those audits have recorded full compliance across every requirement, including confirming the accuracy of assessed entitlements for employees."

It added that both Talley's and AFFCO were recently independently audited by ACC - Talley's in June 2021 and AFFCO in October. Both passed with the highest possible accreditation, showing both companies had improved to the point where they met all applicable standards.

Talley's IMU regularly conducted its own audits, and used external auditors to review calculations, the statement added.

"Talley's and its IMU team emphatically reject any insinuation that they are deliberately underpaying employee entitlements."

'It just wasn't right': Injured meat worker short-changed by $5000

Despite those assertions, 1News can reveal history has repeated.

In November 2021, a month after it passed its ACC audit with flying colours, AFFCO underpaid Richard Fitness, an injured meat worker, by more than $5000.

Speaking to 1News from a Palmerston North motel room alongside his partner Jo McKenzie, the pain was written on his face. His hand would often drift instinctively to his shoulder, where the bone was slowly melting away after 20 years in the industry.

His ordeal began around February 2021, while working at AFFCO Manawatū.

While he was a boner by trade, Fitness ended up on the saw. His job was to cut down beef carcasses as they appeared on the factory line, each one weighing hundreds of kilograms. It was hard, physical work: saw down the ribs, saw down the back and push it along to the next station.

"I'm a hard worker in general, I'll push myself to do it," he told 1News. "I just kept going and going and going, and I slowly, just, slowly worn out."

A few months after he started in the role, Fitness noticed his left shoulder was hurting.

"It got to the stage where I was just getting sorer and sorer, and I knew I was,” he said.

“It [would] only lift so far and stop, and it was just crunching. And it still crunches, and it just seizes up and it starts aching and aching. And the pain down the arm, pins and needles. I’d wake up during the night and my shoulder's just locked into place."

The injury would later be diagnosed as osteolysis, a condition where bone tissue is slowly destroyed. It's very painful, with the bone slowly wearing away, leaving it feeling like it's "melting".

At the time, the cause wasn't immediately clear. Fitness was soon too sore to work, filing a gradual process injury claim to AFFCO. But help was not immediately forthcoming.

AFFCO spent nearly four months investigating his claim and stopped his wages in the interim. It's entitled to do so under the law, but that left Fitness too sore to work and without any income. Soon he was losing weight from the pain, dropping nearly 20kg.

'Living off the basics'

With no money coming in, Fitness was only able to survive with financial support from his partner. His weight dropped as low as 53kg. The couple quickly went into debt.

With the pain constant, Fitness found himself depressed.

"I'd sit there just dazed, just lost," he said. "I felt sorry for Jo getting up, going to work, keeping going, trying to keep the bills afloat, the mortgage, rates, and all stuff like that, and just me being home alone depressed, it’s not a good space.”

They got by on food assistance and whatever they could pick from their garden, with just $30 a week for groceries. They often went hungry.

"We were just living off the basics," Fitness said. "I wouldn't top up my phone, wouldn't have my car on the road, had to stop that."

McKenzie handled much of the ACC work, negotiating with AFFCO to get the claim approved.

His first claim was declined because the paperwork was wrong. The second wasn’t initially accepted, because there was no evidence it was specifically tied to his role as a saw operator at Affco Manawatu. But McKenzie refused to take no for an answer.

"One day at a time, literally it was one day at a time," she said. "There was probably many times where Richard didn't know that I went out and had a bit of a cry because I felt like I was letting him down."

Fitness eventually saw a specialist occupational physician, who found the injury was linked to his entire 20-year history in the meat works, rendered symptomatic at AFFCO.

Dr Michael Antoniadis found AFFCO had followed proper procedures and was within its rights to decline the earlier claim. But his report made all the difference - it was indeed a 'work-related gradual process injury'.

AFFCO finally accepted the claim on that basis in June 2021, four months after Fitness had first asked for help, and he was back-paid for the time he had waited.

'This doesn't add up'

But later, in November 2021, McKenzie found something strange on his payslip. AFFCO had underpaid her partner by more than $5000.

"I actually had a conversation with Richard and said, 'This doesn't add up, I've seen your payslips, I know what you're bringing in," McKenzie said. "I clicked, it just wasn't right."

By November 22, a case manager from AFFCO's Injury Management Unit was in touch to apologise for the company's mistake.

"Thank you for bringing this to our attention, we apologies [sic] for any hardship this may have caused," she wrote in an email obtained by 1News. "I have obtained further information and can confirm the long-term rate is to be amended and increased."

For Fitness, who had waited for so long to get his claim approved, it was "another knife in the back".

"Once again, it's, how many other people are they doing it to?," he said. "It's just repetitive, repetitive stuff from them."

Through its lawyers, Talley's Group said Fitness' case was not evidence of a widespread problem. The company said the situation was an individual mistake that arose due to Fitness being covered by two separate payrolls in the company's system.

"What you have identified is one example of a complex medical claim being determined within the statutory timeframe in accordance with the proper processes, including the employee then being back paid for the entire period," Talley's Group said.

"In this one instance, there was regrettably a miscalculation of entitlements, which as soon as it was identified was fixed and apologised for".

But both Fitness and McKenzie feel the mistake was only rectified because they found it themselves.

"If we hadn't have clicked ourselves," McKenzie said, Fitness finishing her sentence, "they'd still be underpaying."

The question for McKenzie remained.

"Would it have ever have actually been corrected?"

ACC looks into Fitness' case

Auckland ACC law specialist Hamish Peart told 1News underpayments could lead to "quite significant problems" for claimants.

"All New Zealanders pay into ACC, and it's a system for all of us, so it's really quite a basic thing isn't it? You would have an expectation that the calculations are being done properly and you're getting what you're entitled to under the law."

Peart felt questions should also be asked of ACC in its role as the regulator.

"Kiwis have given up their right to sue, so if you have a significant injury at work, the quid pro-pro is that you're going to be able to get compensation or payment through ACC," he said.

"You can't sue the company, and you can't recover your loss of wages any other way."

Further investigation could be warranted, he added, to make sure problems did not persist at Talley's Group.

"If ACC is satisfied that those issues have been fixed, how have they established that?", the lawyer asked.

"It seems to me there should be some kind of independent oversight or independent inquiry."

Like Talley's Group, ACC declined to be interviewed by 1News. In a written statement, it said it had worked closely with Talley's "over the last couple of years" to improve the company's claims and injury management.

Acting chief operating officer Gabrielle O'Connor said ACC had seen improvements over this time. However, she added that the regulator will "continue to work closely with them".

"We take seriously any concerns raised by employees about the way their claim is managed. Talley's employees can contact ACC at any time if they have any issues."

O'Connor did not respond to several specific questions about ACC's regulation of Talley's and AFFCO. She also did not respond to questions about Fitness' case, saying only the following: "We are in contact with Talley's to follow up on the concerns raised by Mr Fitness."

Talley's next audit was in June this year, and further claim file monitoring was planned for the second half of this year, she said.

'Stand up, stand up, you have to talk'

For Richard Fitness and Jo McKenzie, the ordeal will leave lasting scars. A year after he first reported the injury, the meat worker is still waiting on surgery.

Even when it's finished, it will never be the same. His days on the bandsaw are over.

"I don't know what my shoulder's gonna be like once I've had my surgery, and being my main arm, it's still on my mind," he said.

"I still don't know what I'm gonna do yet, but I can’t really do much. [I’m trying] not to think about it until my surgery's done. But it plays on my mind. It does, it takes its toll, but I've managed to slowly put some weight on."

The trauma is heavy for McKenzie too.

"There's nothing worse than seeing someone that you care very muchly for in constant pain, whether it be physically or mentally, and you can't do anything," she said. "All I could do was do my best, as anyone can, to try and keep his spirits up."

The couple decided to speak out in fear others may have been underpaid too.

"Stand up, you have to talk," Fitness said. "You have to speak up, don't let anyone - don’t pull string over your eyes."

Fitness feared, too, that injured workers would return to work while AFFCO or Talley’s investigated their claims. Four months without a decision and without pay was too long for many, he said.

"Some families have kids, and stuff like that, and they still have to push on because they still need to support their family, regardless of their injury," Fitness said.

"I don't want to see other families go through this, especially families with children," McKenzie added.

A final message

A year after it all began, it's clear the experience left the couple with a strong bond. Throughout the interview, Fitness' hand was always close to McKenzie's. They often chatted quietly, their fingers intertwined.

And as it wrapped up, the couple had a final message for anyone working for Talley's Group.

"You're just a number at the end of the day. They don't care," McKenzie said.

Fitness echoed the same thought.

“Any sort of injury, get it dealt with, don't let them tell you otherwise!"

Do you have a story to share about Talley's Group? Email Thomas Mead on thomas.mead@tvnz.co.nz