Go Bus says it'll lock out drivers who have vowed not to collect fares for two weeks, saying it's a health and safety threat to non-union drivers.
From Monday, around 120 members of FIRST Union plan to let passengers ride for free in Hamilton, Te Awamutu, Otorohanga and Katikati in protest against "abysmal" pay.
"Drivers are determined to achieve a Living Wage," FIRST spokesman Jared Abbott said on Friday. He said the union's tactic of not collecting fares, rather than walking off the job, was to punish their employer and not passengers.
"By refusing to accept payment passengers are actually better off rather than having to make other arrangements."
Go Bus on Sunday said it "cannot allow this to happen".
"The majority of drivers are non-union members, but the decision from First Union members to not collect fares puts all other drivers at risk of verbal abuse and physical assault if passengers think they are going to get a free ride, and don't," said chief operating officer Nigel Piper.
"Go Bus is contracted to provide bus services in the region and collecting fares is part of that contract, therefore we must act."
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He said Go Bus supports the Living Wage movement, but simply can't afford to pay it.
"This is a financial decision that must involve councils and the NZ Transport Agency who collectively fund our services and set the passenger fares... We are more than happy to work with them in presenting the case to the authorities that fund the bus services."
Go Bus says it will pay the Living Wage, currently set at $20.55 an hour, when every other bus operator was forced to as well, and the cost is "fully recoverable".
Paying the Living Wage would give bus drivers a 16.2 percent raise on top of a 6.7 percent raise they got earlier this year, the company says. That would put drivers' current wages at $17.69 an hour - $2.19 above the minimum wage.
Go Bus and the FIRST Union have been at loggerheads for more than a year.