C2005/4677, Transcript of Proceedings [2005] AIRCTrans 1960 (21 September 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 12790-1

COMMISSIONER BLAIR

C2005/4677

KOZMA INDUSTRIES PTY LTD
AND
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.127(2) - Appln to stop or prevent industrial action
(C2005/4677)

MELBOURNE

2.13PM, FRIDAY, 09 SEPTEMBER 2005

PN1

MR A DALTON: If the Commission pleases, I represent Kozma Industries Pty Ltd today, and with me is MR C ELLUL from Kozma Industries Pty Ltd, and also in the body of the court is MR M BROHIER from Air International.

PN2

MR B TERZIC: I appear on behalf of the respondent the AMWU, and with me I have at the bar table MR C SPINDLER, and I also have present in the courtroom with me the leading delegate from the company, MR ARAD.

PN3

THE COMMISSIONER: Thank you, Mr Terzic. Yes, Mr Dalton?

PN4

MR DALTON: Just before I commence, Commissioner, I would like to apologise for the fact that I am inappropriately attired today. I was in my office in Geelong, and you knew I was going to be working down there today until an hour or so ago when I got your phone call to attend the Commission, so I apologise I didn't have my coat with me.

PN5

THE COMMISSIONER: I suppose the Commission should be grateful that you are not Mr Marasco on Friday. I understand it is dress down day for him.

PN6

MR DALTON: Well, this is dress down for me too as you can understand. Commissioner, just to give you a bit of background in this particular matter, Kozma Industries manufactures seating parts which go to Air International and are used for the Ford Territory. The parts are firstly manufactured at the company's Bayswater plant and then are transported out to the company's Campbellfield plant, and they are finished out there, and then forwarded on to Air International.

PN7

The company has approximately 45 employees at its Campbellfield plant, and 230 at its Bayswater plant. The company is respondent to the Metal Engineering and Associated Industries Award. There is no current EBA at this point in time. The company was negotiating an agreement with the union. It had been finalised, but upon examination it was found to contain matters that they thought could contravene the Electrolux issues, and so those matters are still with the parties to finalise.

PN8

The action that is occurring is that the employees are on strike at this point in time, and that strike commenced at 7 am this morning. There are vehicles blocking the company's driveway, and rather than the normal eight deliveries that are made to Air International on each day, only one delivery has been made today.

PN9

The implications of this particular industrial action are that Air International only holds one day's stock. If the action continues the stock will be depleted and by around about 9 am on Monday, 12 September. That will affect about 200 employees at Air International, and I understand from the people at Air International who have contacted Ford that it will affect the whole line at Ford because the Territory and the Falcon and so forth are all made on the same line, and that will effect about 5,000 employees at Ford.

PN10

The reason I understand for the industrial action is that the company lost a $15m part of its business effective from May 2006. This was a contract with Toyota, and this contract has gone to Thailand. So in effect from December this year, 22nd or so of December, the company has to make about 50 employees redundant, and that has led the company to look at rationalising its operations, and currently the company has around about, I think, seven plants in all, and the company has decided to rationalise its operations to improve its efficiency and reduce duplication, and so with the loss of the work from Toyota, it has decided to close the Campbellfield plant effective, as I say, at the end of December.

PN11

The company announced this formally to employees and the union on 1 September this year, however, the parties were advised of the loss of the contract 12 months ago.

PN12

In terms of this, a section 127 order application has been made to the Commission to stop this industrial action. This industrial action is not protected action. There is no bargaining period in place, and there is no protected action notice that covers this particular action taken by the union.

PN13

In terms of this, in seeking this 127 order, the company would advise the Commission that we believe that you have the appropriate jurisdiction to issue the order under section 127 of the Act.

PN14

We would say that there is industrial action occurring. This industrial action is in relation to an industrial dispute, and this industrial action is work that is regulated by an award, being the Metal and Associated Industries Award 1998.

PN15

We say the Commission does have the jurisdiction to deal with this particular matter, and we would also advise that we believe the Commission should exercise its discretion to grant this order because the action by the union is having significant detrimental effect not just on Kozma Industries, but also potentially from Monday on Air International, and also on Ford, and potentially disrupting work of both those plants and the livelihoods of the employees working at those plants.

PN16

I have both Mr Ellul here today who is the managing director of Kozma. If the Commission wishes me to put him into the box to explain the business case for the closing of the Campbellfield plant, I would be happy to do that. I also have Mr Brohier of Air International who I am also prepared to put into the box to explain the implications for Air International, but if the Commission is happy, I am happy to leave it at that, and let the union put its submissions and see where we go from there.

PN17

THE COMMISSIONER: No, I think that will be fine, thanks, Mr Dalton. Yes, Mr Terzic?

PN18

MR TERZIC: Firstly, Commissioner, I don't want to concede or admit to the version of events that has been put by the applicant in this matter, but I would just like to briefly address the Commission's procedures when faced with an application under section 127, and the nature of the section.

PN19

It has been said by members of this Commission before that the making of an order under section 127 is a serious step.

PN20

THE COMMISSIONER: Why don't you address the Commission on the issue? Don't worry about the procedures; address the Commission on the issue as to why you say the company in their submission is right in terms of the detail or wrong.

PN21

MR TERZIC: Commissioner, I would prefer not to enter into any sort of substantive submission at this stage, and rather just tell you where I am going quickly, and that is the union here makes an application to have the matter adjourned into conference so that the parties can explore a settlement that would perhaps assuage the concerns of the striking workers, and have them return to work.

PN22

If such a settlement was reached over the way in which the redundancies are to be managed or carried out or how the company is to continue its operations that would render the need for an order under section 127 otiose.

PN23

So it is on that basis that I would prefer not to enter into a discourse or submission about our version of events, because such might inflame the situation. Rather, I would ask that such assertions by done off the record, without prejudice, in an attempt to find a settlement, and I can submit to the Commission and to the applicant and the manager of the business that the union is here today serious about trying to find a resolution to the impasse that lies between us.

PN24

So it is on that basis that we say that a short adjournment would be the most expedient and effective way of dealing with the matter that is now before the Commission. If the Commission pleases.

PN25

THE COMMISSIONER: Mr Dalton?

PN26

MR DALTON: We have no objection to going into conference, Commissioner.

PN27

THE COMMISSIONER: Okay, thank you, Commission will go into conference.

<SHORT ADJOURNMENT [2.24PM]
<RESUMED [4.10PM]

PN28

THE COMMISSIONER: The Commission has had an opportunity to have discussions with the parties off transcript in order to try and resolve the differences between the parties in regards to this particular issue. Unfortunately, we haven't been able to reach any agreement. Mr Dalton, do you wish to on behalf of your client wish to press the application under section 127?

PN29

MR DALTON: Yes, we do, Commissioner.

PN30

THE COMMISSIONER: Do you wish to make any further submissions?

PN31

MR DALTON: Not at this stage, Commissioner, I will wait to hear what my colleagues have to say, and if that requires anything further we will go from there.

PN32

THE COMMISSIONER: Thank you. Mr Terzic?

PN33

MR TERZIC: Commissioner, I am not going to try to persuade the Commission that the jurisdiction doesn't exist for the Commission to make an order in terms set out in the Australian Industry Group's application, but I would say that the union would implore the Commission to exercise its discretion not to issue the order on the grounds that the employees have a genuine apprehension about their futures given that they will soon be terminated and made redundant and left to fend for themselves on the job market, and the union takes the view that they should not be required to work until a satisfactory severance package or some other arrangement was offered to them, and it is on that basis that we would ask the orders not to be issued, but I won't put any evidence and press that matter any further. If the Commission pleases.

PN34

THE COMMISSIONER: Thank you. Mr Dalton you indicated that, I think, there was an afternoon shift. Is that correct?

PN35

MR DALTON: Yes, there is an afternoon shift, Commissioner.

PN36

THE COMMISSIONER: What time do they commence?

PN37

MR BROHIER: 3.30, Commissioner.

PN38

THE COMMISSIONER: And what time does the afternoon shift finish?

PN39

MR BROHIER: Midnight, Commissioner.

PN40

THE COMMISSIONER: Thank you. The Commission does understand the difficulties that the employees at Kozma Industries are facing given that, possibly, the maximum length of service is only about 18 months, and the employees did have an expectation that at least based on a contract that there would be possibly five years employment.

PN41

Unfortunately, the company has lost a significant contract with Toyota which I understand equates to about, I think, $15m, and the company have made a decision to rationalise their operations, and because of the loss of contract at Toyota, it means approximately 40 to 50 employees need to be made redundant.

PN42

The company have made a decision that the Campbellfield site that does have approximately 50 employees would be rationalised to the extent that it would be closed and the functions transferred to the Bayswater site where there are some 230 employees as the Commission understands it.

PN43

So the Commission does understand the apprehension on the part of the employees. However, given the nature of the auto industry, and given that Kozma Industries Pty Ltd are a second tier supplier who supply Air International who are a first tier supplier at Ford Motor Company and are the companies, because of non-production at Kozma's Campbellfield site there is the effect that Air International by Monday, that is Monday, 12 September, are likely to stand down some 200 employees. The knock on effect of that is that then disrupts the Ford production system. That could have a knock on effect of possible stand down of some 2,000 employees, maybe more, given if the effect also flowed to Geelong. There are other suppliers that maybe affected by such continued action on the part of the employees of Kozma Industries Pty Ltd.

PN44

The industrial action revolves around a desire of those employees of Kozma Industries to remain employed. However, the Commission would have to say that in all reality the company having made the decision to rationalise its operations it is very rare in the Commission's knowledge that such a decision would be reversed. So the focus has been on trying to put together a package, a redundancy package, understanding that as the Commission said earlier there is approximately, at most, about 18 months service.

PN45

The Commission believes that it is appropriate and the requirements have been met to issue the section 127 order in the terms sort. The order shall apply from 5 pm today's date, 9 September 2005, and the order shall remain in force until midnight of 22 December 2005.

PN46

If it assists the union the Commission and the recommendation would also go to the employer, the Commission would recommend that there be a bonus of $1,000 paid to each employee to be made redundant. That normal production rates of $150 car sets a day be continued. That the Commission understands that there are possibly two to three casuals that they are to be full-time employees for the purposes of any package. Unused sick leave is to be paid out. Four weeks pay per year of service or part thereof is to apply. Those employees that are over 45 are to receive the additional weeks' notice. That if an employee were to leave in between now and 22 December 2005 then the union would raise no objections to that piece of equipment that that employee was operating be moved to the Bayswater site, and that the three public holidays, that is, Christmas Day, Boxing Day and New Years Day be paid out as part of the package.

PN47

The Commission would strongly recommend that the union take that back to their members and that the company pick up the additional issue of the three public holidays in order to try and settle this particular matter.

PN48

The Commission will issue the orders so if the parties care to wait we will get them done as quickly as possible. The Commission will stand adjourned.

<ADJOURNED INDEFINITELY [4.19PM]