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C2002/ 1316 , Transcript of Proceedings [2002] AIRCTrans 1053 (2 April 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
DX 305 Melbourne Tel:(03) 9672-5608 Fax:(03) 9670-8883

TRANSCRIPT OF PROCEEDINGS

O/N VT03011
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT WILLIAMS

C2002/ 1316 

NESTLÉ AUSTRALIA LIMITED

and

AUTOMOTIVE, FOOD, METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION

Notification pursuant to Section 99 of the Act
of a dispute re alleged failure of the union to
abide by the Continuity of Production and Dispute
Resolution procedure in the agreement

MELBOURNE

11.42 AM, FRIDAY, 15 MARCH 2002

PN1

MR D. DAVIES: I am a consultant and I seek leave to appear on behalf of Nestlé Australia Limited. If leave is granted, MR P. MILLAR, who is the production executive responsible for confectionery operations in Victoria, will appear with me.

PN2

MR C. JOHNSTON: I appear on behalf of the AMWU along with our delegates, MR R. MATTHEWS, MR G. COOPER, MR A. AVOUSKIA, MR C. REECE and MR J. SMITH, and I apologise for being a few minutes late.

PN3

THE SENIOR DEPUTY PRESIDENT: Any objection to Mr Davies having leave?

PN4

MR JOHNSTON: No, I have no objection.

PN5

THE SENIOR DEPUTY PRESIDENT: Leave is granted, Mr Davies.

PN6

MR DAVIES: Thank you, your Honour. I just want to take some time to set these circumstances behind the notification. I am not trying to beat about the bush but I think it is important that you understand where we are coming from with all of this. My client's operations in its confectionery division are covered by the certified agreement known as the Nestlé Confectionery Framework Enterprise Agreement of 2001. That was certified by Vice President Ross on 22 August 2001 and the agreement is in force until 24 November 2003.

PN7

The agreement covers four confectionery factories operated by my client, three in Victoria and one in New South Wales. One of those factories in Victoria is at Maryborough and my client has announced the closure of the Maryborough factory. That announcement was made to all of the affected employees, to the union and to the world at large in August of 2001. The factory is slowly winding down but it is anticipated it will be closed in total in December of this year. There have been bans imposed and they go to three key issues from my client's point of view. As a consequence of the closure of the Maryborough factory, employees will be made redundant, so redundancy is one issue.

PN8

Secondly, the products which are being produced at Maryborough will be picked up by a manufacturing operation in New Zealand and some of the equipment at Maryborough is to be transferred to New Zealand. Thirdly, as a consequence of that, there is an interim period where people from New Zealand will be coming to Maryborough to train on that equipment that they will eventually operate. In relation to the redundancy issue, which clearly is at the core, from our point of view, of this dispute, the compensation for redundancies are dealt with in a comprehensive attachment to the enterprise agreement to which I have referred, and that attachment has been certified as part of the enterprise agreement.

PN9

It establishes a detailed and comprehensive set of conditions which will apply in the event of employees being made redundant. As I have indicated, the factory that is to close is in the Maryborough district. In terms of job opportunities for employees beyond the closure, my client has been mindful of the need to try and develop that. There are some 145 people originally employed at Maryborough and that excludes casuals. I am instructed that about 18 people have left already and received redundancy payments. There are about 127 people, including staff, that is all up, involved.

PN10

In addition to the redundancy benefits that are provided for in the enterprise agreement, the company, mindful of the impact on the local community, has provided a financial contribution to local government to enable them to attempt to attract new employment into the area, particularly to the particular industrial estate where the Maryborough factory is located. In terms of dealing with the future of employees, the company has provided careers counselling for each employee.

PN11

It has provided financial planning consultation for each employee and it is financing a training package to enable employees to access training in additional skills, and that has been coordinated by the Bendigo TAFE. The sort of areas in which training has occurred is in, I am instructed, horticulture, forklift operation, articulated vehicles and so on. I am also instructed that one employee has suggested she might seek training as a stripper, your Honour. That matter is still under consideration.

PN12

THE SENIOR DEPUTY PRESIDENT: So is their application for registration.

PN13

MR DAVIES: Indeed, indeed. Most of these issues have been volunteered by the company, your Honour, and it has been done as a consequence of a process of consultation with the employees, the unions and the local community. We have worked to comply all the way through with the provisions of the enterprise agreement and, indeed, in some aspects have gone beyond that. Negotiations in recent times have focused on a range of issues, one of which is, I think, referred to by the union as a closure payment.

PN14

There is a provision already in the enterprise agreement that if an employee who has been nominated to be made redundant is asked to stay for a particular period of time, then a retention payment is paid to that person and that is the greater of three weeks' ordinary pay or $1500. Based on the base rates of pay at the Maryborough factory, three weeks' pay is worth about $2000. So that benefit already exists for people who are asked to stay on. The unions made an unhelpful $20,000 claim for closure payment over and above whatever else is available under the redundancy agreement. With such a high figure on the table, I think unrealistic expectations have been created.

PN15

An entitlement to a retention payment, as I have indicated, is already settled in the enterprise agreement. Nevertheless, the company did put an offer to the union which would, in fact, increase that retention payment. Negotiations took place last week on 6 March. There was subsequently a meeting on that day between union officials and its members and bans were imposed, as set out in the notification which was filed with this Commission by Minter Ellison. It is fair to say that the negotiating agenda is wider than just the retention payment or the closure payment.

PN16

There have been some concerns about the training issue but our understanding is that they have been largely resolved. There is an issue that had been put to us in relation to compensation for employees of the factory who are not covered by the redundancy provisions of the enterprise agreement in the sense that these people are temporary and long term casual employees. The company has been asked to determine an attitude in relation to those people, and there is a further issue, which may or may not be on the table - I seek some guidance from Mr Johnston on this - about the further assistance to the local community arising out of the closure of the factory.

PN17

With that sort of background I have to say that we are here more in sorrow than in anger today. We believe that we have tried to deal with all of the matters that have been raised since August 2001 in a consultative and professional way. We followed, we believe, the EBA provisions to the letter and have built on them because we were persuaded to do so. We have been and still are negotiating in good faith and, from our point of view, those negotiations are yet to conclude. Your Honour, the enterprise agreement contains a disputes resolution procedure as, in fact, the law requires. Subparagraph 6 of that procedure says:

PN18

At all times work will continue and consideration of the needs of the enterprise will remain a priority.

PN19

Now, we say that the action by the union and its members last week flies clearly in the face of the agreement that they entered into with us and, as I say, which was certified only in August of last year. As I have indicated, there is still room, we believe, for further discussions with the union on the issues that are outstanding. What we are seeking today is, I guess, something I can express in four parts: first of all, a recommendation from this Commission in the strongest possible terms to the union and its officials that bans be lifted and that work resume free of bans and limitations as soon as possible.

PN20

To facilitate that, the second point we seek is a undertaking by the union officials that they will support such a recommendation at a meeting of employees at the factory, and it would seem the most convenient time for that to occur would be probably 2.30 pm on Monday, given the logistics of getting back to Maryborough today. That is predicated on the basis that there would be further discussions between the parties, assuming that the bans are lifted. That is point 3. My fourth point is that we would seek a report back date to the Commission which, if things go according to Hoyle, could be vacated, assuming that bans have been lifted and work has resumed and negotiations continue.

PN21

Your Honour, just in support of that package that I have put together, we say that the industrial action discourages potential further investment at that site. It creates an atmosphere and sends a signal to people who may want to put money into the operation that they are dealing with what I might describe as a recalcitrant workforce. We are disappointed that there seems to be no consideration of the fact that we provided 16 months' notice of the closure of the factory. We announced it as early as we could. We didn't sort of say to people on Friday, well, sorry, the factory is closing on Monday. As I said, we have given as much lead time as we can and we have done that in a very consultative way and we have been consulting since day one.

PN22

We are prepared to continue to negotiate with the union on the issues. We don't believe the discussions have been exhausted. The agreement that the parties have entered into creates rights and responsibilities for both sides. There is a responsibility to follow the disputes procedure and we say that that applies equally to the union and its members,and for that reason we seek the package of recommendations that I have outlined earlier. If it please the Commission.

PN23

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Johnston.

PN24

MR JOHNSTON: Yes, Senior Deputy President, we would just like to go through a very brief history and what we would be seeking then would be with the assistance of the Commission to go into conference. Just to the history though, this plant was built in the mid '80s. It is a modern plant. We have been told by the company that this workforce have achieved every productivity indicator that has ever been put to them, every efficiency. The IR climate has been there has never been any stoppages at this plant and at this stage I say we make no admission about whether we are or aren't having an industrial campaign or whether there are bans and limitations.

PN25

The company makes the claim that they certified an agreement in August and that is right but within two weeks of certifying the agreement they announced the closure and we say that was dishonest. They clearly knew that the closure was on the books. They should have flagged that to the unions. There may well be some argument that it was an old plant or there was any sort of question mark hanging over it but, as I say, this plant was built in the mid '80s. It is a highly efficient, modern plant and any reasonable person would not expect that this announcement could be made.

PN26

The issues, if you like, for the unions are these. The unemployment rate in Maryborough, as in regional Victoria, is fairly high. Five per cent of the total workforce of Maryborough work at Nestlé. For the plant to close it will devastate the local economy and those workers and while I accept that the company believed they were doing the right thing by giving them some 16 months' notice, the view of the workers and the union is they are being executed and whether they have got 16 months or six months or six days, they are still being executed.

PN27

So what we have been trying to do is to encourage the company and this state government to work with the unions about trying to get someone to come in and take the plant over or put in a new operation, because all the money in the world is not going to compensate the workers for loss of a job. So the issue that the company gave $200,000 to the local community, there was never any discussion with us about that and we had been both politically rallying, having marches through the town and representation to government and the company to see what could be done to, if you like, get the plant - because it is an extremely modern, up to date plant - converted to some other purpose.

PN28

The other issue, of course, for us is the issue of a closure package. Our members feel that unless there is some guarantee of some new employment, and we certainly don't have that, that while the redundancy package is a reasonable one by, let us say, industry standards, for most workers, there have been no workers there more than about 14 or 15 years because the plant, as I say, is a new one, and most of our members, unless there is some new employer up there, are looking at very, very long periods of unemployment or to, in fact, move out of the town.

PN29

So we have been seeking from the company some increase in - if you like, for a closure package and in most agreements, while we have a redundancy provision similar to what we have with Nestlé, it normally has a provision - I accept that the current agreement doesn't - normally has a provision about if there is a closure there would be some extra sort of compensation for the workers because we see there is a difference between redundancies when some people are made redundant, when there is at least some element of volunteers versus a total closure. So, as I say, we would seek that the parties go into conference to try to resolve those issues.

PN30

On the issue of long term casuals and I think what they call fixed term employment, some of those people have had substantial periods of time and we also want to talk to the company about what sort of compensation will be offered to them because we are not talking casuals who had been there for a month or something; we are talking some that have been there 12, 18 months, two years, three years and what they call fixed term, which, as I understand, they work a 26-week fixed term employment and then are terminated.

PN31

But we have got a number that are on their second 26 weeks, so which is basically a year's employment and on that basis we believe they should be entitled to some form of compensation when they are made redundant like everyone else. So they are the broad issues and, as I say, we would seek that we could go into conference under your chairmanship and, hopefully, get some resolution.

PN32

THE SENIOR DEPUTY PRESIDENT: Do you say that these issues haven't been the subject of discussion at all?

PN33

MR JOHNSTON: There has been, as I understand, a couple of discussions. I only was at the initial one. I haven't been at the recent ones because of a number of other matters in this industry that are subject to proceedings in other jurisdictions. That is why I am here today, because - - -

PN34

THE SENIOR DEPUTY PRESIDENT: I anticipate from what you say that you don't think these discussions are at an end, in any event, that there is some potential for further discussions.

PN35

MR JOHNSTON: Well, we would hope that but, as I have been informed, the company said that the offer they put the other day was their bottom line and that was it, and it was felt that wasn't enough. But, as I am told, when there was a meeting of members, the members said, well, if that is the bottom line, that is not enough. But I don't believe there was a resolution from the unions to say that there should be any industrial action. But, as I say, I understand that the members felt that the offer of the company was inadequate and they weren't happy abut that and, as I say, it is my understanding there has never been a stoppage at this plant in the past 15 years.

PN36

Their IR record has been, probably not from our point of view but from the company's point of view, exemplary and so I reject that Mr Davies said that any potential employer might see that these workers are recalcitrant and would scare off potential investment. As I say, we believe that they have done absolutely everything that has been asked for them and for all that good work they have got it in the neck.

PN37

THE SENIOR DEPUTY PRESIDENT: Are you saying there is no industrial action taking place at the moment?

PN38

MR JOHNSTON: No, I am not saying that. I am just saying we are not admitting there is. I am not aware of all of it because I am not that close to it. So I am not making any admissions but I don't know what - I mean, there is a debate about what industrial action is and what constitutes it, etcetera, etcetera.

PN39

THE SENIOR DEPUTY PRESIDENT: Well, that is perhaps something that we can return to at a later stage. Do you wish to add anything, Mr Davies, before we go into conference?

PN40

MR DAVIES: No, other than to say that Mr Johnston, apart from the early stages of negotiations, hasn't been involved. I understand that by and large Ms Halfpenny for the union and Mr King, an organiser from the Bendigo office, have been involved in the ongoing negotiations of the issues, your Honour. In terms of the suggestion that we go into private conference, we have indicated that there is scope for further discussions on the matter.

PN41

Clearly, we would prefer to do that without there being any industrial action and I would be interested, perhaps, if Mr Johnston is not aware of what the industrial action, if indeed there is any, whether perhaps that the delegates might be able to instruct him but, nevertheless, that is a matter we can come back to. If we are to go into conference under your chairmanship, we are certainly prepared to participate in such a conference.

PN42

THE SENIOR DEPUTY PRESIDENT: The Commission will adjourn into conference. It may be necessary to go back on the record at a later stage. The Commission is adjourned briefly.

NO FURTHER PROCEEDINGS RECORDED