Let's Start All Over Again
Ladies & Gentlemen, is Australia a Free Country?
This is the question you should all be able to answer when I have finished my few words tonight. Failing that, you may wish to ask some of the sitting labour members who are being pursued by 'standover merchants, thugs and other sleazebags' according to backbencher Warren Snowden this week.
Senator Nick Minchin, President Ray Evans, Mr Charles Copeman, distinguished guests and members of HR Nicholls Society.
I have been a member of the Society for over ten years and have attended most Annual conferences. I have witnessed the presentation of the Charles Copeman medal to many very worthy recipients. However I was very surprised and flattered when I was approached to be this year's Charles Copeman Medal winner. I was amazed that what I and my wonderful team members have endured over the last ten months was worthy of such recognition. My sincerest thanks to the committee for your acknowledgement of what we have been through.
Tonight I intend to give a background of our business, the strike and then my thoughts on where Industrial Relations are going in Australia.
My late father commenced our business in 1947 after returning from military service in Borneo during WW2. The business was primarily in metal manufactures, namely pressed metal, turning, spot welding etc. In 1955, they built their first plastics injection moulding machine.
I joined the company 28 years ago, having worked for a number of different businesses locally and overseas. During my time at Kemalex I have participated at local and national levels with industry and employer associations; namely the Plastics Industry Association (now PACIA), Business SA (was SAECCI), Engineering Employers Association and its national affiliate the AIG (formerly MTIA)
Our company tried to participate in Award Restructuring many years ago until our employer association warned us that if we tried to have our agreement ratified by the Commission then an unwanted Third Party would be present at the commission hearing. The third party was to be a Union. As a result, our team members decided not to go down the Award Restructuring path. After all, our company had no union members and our team wanted it to stay that way. In fact, during our 58 years of business, our company never had an unfair dismissal claim and we were on maximum bonus with Workcover in South Australia.
I had witnessed for many years member companies of our employer association constantly being dragged off to the Commission because of alleged underpayment of wages, or unfair dismissal claims, etc., etc. I had no desire for our company to participate in this total waste of time. However, I also knew that as we grew our business there would be an ever-increasing risk of someone or a group making a mischievous claim against our company.
In addition, Workcover in SA was making it more and more difficult for employers should the employee aggravate an alleged prior medical condition during their employment with our company. In other words, just because a person injures themselves on a school play gym or falling off a rocking horse, the employer's Workcover record is negatively impacted should their medical condition be allegedly aggravated by their employment with our company, irrespective of whether the employee disclosed the condition prior to commencing employment. Ladies and Gentlemen I had, and I still have, a problem with this issue.
Consequently, all future job applicants had to have thorough medicals prior to an offer of employment being made. The first time we went down this path, four of the five candidates failed their medicals and one has since died. However we needed to work with one of the applicants but not take on the possible onerous medical liability should he aggravate his condition while sitting at a computer terminal.
So given the difficulty of working within the constraints of the normal employer/employee relationship and dealing with Workcover, I decided there had to be a better way. And there was. At the Society's conference eleven or twelve years ago at Brighton I was delighted to hear our very own Ken Phillips' presentation titled 'Creating Non Employment'. As many of you will recall, his speech explained very clearly the benefits of working with self-employed contractors engaged through the Odco method. Not a 'sham' method of contracting. A method of contracting that was defended by our Federal Treasurer in his previous life as a barrister.
We introduced self-employed contractors with the full knowledge of all our full-time employees. They all understood that any new people working at our Adelaide factory would be self-employed and that no existing staff would be in anyway encouraged to become self-employed. As a result, over the next ten years, by evolution 85 per cent of the team were self-employed. In fact, a number of employees did resign and signed up with the agency we were using for our contractors.
In early 2002, we purchased a plastic moulding business in Melbourne from Pitcher Partners who were the Administrators. The previous owners had purchased the business from a liquidator two years before that. Clearly the business needed to have some changes if it was to survive supplying plastic parts to the very competitive automotive industry. Again we decided to introduce self-employed contractors by evolution. This was explained to the union, namely the National Union of Workers. In fact, it took three meetings to explain to the union what it was we were doing, again with no threats to the existing staff assuming customers continued to buy from us.
The NUW were not at all pleased that Richard Colebatch wanted to run his business his way, the legal way in compliance with the Enterprise Agreement that they had previously negotiated with me. Consequently, the union patiently waited for our next Enterprise Bargaining phase to commence in late February last year. At this time, their log of claims was so ridiculous I had to ask them what they were smoking at the time they dreamt up their demands.
Some of the demands were a 10 per cent wage increase each year with no offsets, state LSL provisions, redundancy of six weeks per year of service with no cap, pay out all unused sick leave upon termination, preference of overtime to full-time employees and wait for it, removal of all sub-contractors from our site. Can you believe it?
Naturally we had numerous meetings with the Union, but at the end of the day I had more success talking to the brick wall in my office. The union clearly wanted to have a fight.
During our negotiations with the Union we had consulted with the Australian Industry Group for advice. However, when the strike was threatened, the AIG industrial officer suggested that we should engage a competent solicitor to assist us. Needless to say, we had already engaged Tanya Cirkovic & Associates due to the poor/little assistance being provided by the AIG and their clear reluctance to stand beside us when the heat came on. The AIG's CEO has written to me recently and threatened to consider their options should I continue to tell the truth about the AIG's reluctance to assist us during the strike. Fancy thinking her threats are going to make any difference when I have been threatened by the biggest goons of the union movement who are all trying to enter Federal Politics! Heaven help Australia.
The Union and 47 of our employees commenced a strike (protective action) on the 27th April 2005. Caravan, port-a-loo, electric generator, tents, banners, signs, fires and mountains of wood were set up immediately outside our factory in both Tatterson and Greens Road. The area became an absolute eyesore, however the Dandenong Council did absolutely nothing, even after many of the neighbouring businesses complained.
The picketers manned their positions on each of the three shifts, seven days per week. Loud speakers, whistles, yelling, abuse, threats, vandalism etc., 24 hours per day.
Just prior to the commencement of the strike, a number of customers retrieved their tooling and product while one requested we move theirs to our Adelaide facility.
We formed a 'war cabinet' consisting of our solicitors, an IR barrister, myself and three IR consultants. The best advice I was given at this time was that the Union is not interested in results; it is only interested in the process. How true that advice turned out to be. Our group met regularly and agreed that nothing would be done by any member without the approval of the group. Everything had to be co-ordinated.
The Union made application to the Australian Industrial Relations Commission in an effort to try and see if our company would buckle and give in to their demands. I told Senior Deputy President Jenny Acton that I was prepared to withdraw all the sub-contractors from our factory if the union was prepared to take responsibility for our customers and bank, otherwise she could tell the union from me to get stuffed. On the second hearing and after many private discussions with the Commissioner, the Union dropped their last demand, namely the withdrawal of all sub-contractors. This back-down by the Union was most unexpected and therefore we required more time to consider their remaining five demands.
Two days later, and after significantly more pressure, threats, intimidation from the picketers, union officials and their 'rent a crowd', we announced to Senior President Acton that the company would not negotiate an agreement where the Union was to be a party to it, instead we decided to negotiate directly with our employees. Needless to say, the Union was very surprised at our attitude and after another threat was made by the union, Senior Deputy President Acton adjourned the matter indefinitely.
The daily (and nightly) task of defending ourselves against the most disgusting, foul-mouthed, ugly people women have ever given birth to was full-time. Many of the Rent-a-Crowd were or appeared to be members of the Maritime Union of Australia, CFMEU and like-minded unions.
The Union utilised its Website very effectively. The statements made about our company were generally prefaced by the word 'alleged' or it was 'rumoured'. Many other Leftist sympathisers copied and pasted these onto their own Websites. What was interesting was that the copying was never accurate and the numbers always grew to enhance the impact of the message. Journalists, present company excepted, were equally lazy and, nine times out of ten, merely copied and pasted from the Union Websites.
We made a decision from the beginning not to make any public comment whatsoever as this was a battle we could never win with the 'left' media. After the Kerry O'Brien 7.30 Report we received numerous e-mails complaining about our 'alleged' demands of forcing all our employees to be sub-contractors etc., etc. We responded politely to each e-mail, thanking them for their interest and promising to inform them when we do make any public comment.
After four weeks of the strike, our first public statement was released exclusively to journalist Robert Gottliebsen who published his article in The Australian. We immediately handed a copy of the statement to each of our associates inside and outside both plants and then released the statement onto our Website.
People who had earlier e-mailed us were notified of the statement on our Website. The feedback from a number of them was amazing. They expressed total amazement at the manner in which the facts had been twisted by the ABC's 7.30 Report.
Eventually an olive branch was presented to our lawyers from the State Secretary of the NUW, Martin Pakula. By the way, this is the man who is trying to muscle out Simon Crean from the seat of Hotham where our factory was. Some of you may remember that Simon Crean successfully muscled out Jenny Acton from pre-selection for the same seat some years ago. The whole strike was orchestrated by the union movement to lift Martin Pakula's profile amongst his peers before seeking pre-selection. The Sun-Herald reported this during the Strike.
Martin Pakula conveyed to Tanya Cirkovic that she had a madman for a client. There were a number of times during negotiations and at the picket line where it was necessary for some theatre on my part---after all, I was mad. If requested, I may expand upon one of these occasions.
It took a further four weeks of daily negotiations with the Union representatives, solicitors and me. However, after meeting regularly with the Assistant State Secretary and the State Secretary of the Union, the most significant turning point in the negotiations was when the Assistant National Secretary intervened. What the State officials could not or would not entertain, the Ass National Secretary very quickly indicated that what we wanted was do-able. The particular issue at the time was our need to pay for 38 hours work rather than 35.5 hours.
The next significant turning point was when the Union agreed that they were prepared to accept a two-year agreement rather than their three-year demand.
The final turning point of significance was when the winter southerly winds eventually came to the picket line with the associated drop in temperature and much rain.
The pressure on our team of associates working inside the factory throughout the strike cannot be understated. They were all under an enormous amount of stress and abuse from the Union picketers. Some of their cars were vandalised and some were visited by Union officials at their homes in an effort to convince them to turn against the company by making false statements. It was very important to keep close to all staff so that these issues could be addressed. All the damages to staff cars were repaired at the company's expense.
After the return to work and prior to the appointment of the Voluntary Administrator on the Monday 31st October, a total of eight 'former picketers FP' had been counselled and/or given their first and second warnings for a number of issues, including not following Operating Procedures which resulted in poor quality. There were a number of customer complaints where the employees FP had been deliberately sabotaging product manufactured. In addition, the amount of sick leave taken reached the level of the great plague. A number of new medical conditions were reported, including PTS (Part-time stress). Able to work Tuesday, Thursday and Fridays for a number of weeks until the Workcover claim was finally rejected by the insurer. Conditions greatly improved.
Five employees FP submitted Workcover claims for a number of medical conditions. Only one had been formally rejected at the time of VA appointment.
An employee FP was caught working as an employee for a public company while taking paid sick leave from our company. Needless to say, sacked on the spot and escorted off our premises.
Our ability to run the company as per the Enterprise Agreement was immediately challenged by the NUW. The NUW wanted the company to make three of their members FP redundant due to our transferring (returning) them to lower paid duties with the appropriate notice. Given that there was a very high absenteeism and large back orders, it seemed ridiculous that the company could be forced to payout a redundancy lump sum (reward) and then hire three new workers and spend another lump sum training the new workers. However, experience says that this logic lunacy is well and truly alive when it comes to the AIRC. This gamble and the pending significant legal costs were the last straw, in addition to the others previously mentioned.
Prior to the VA appointment, three of our Melbourne customers requested in confidence that we move all their tooling, fixtures etc to our Adelaide facility. The second time for one customer. On the Melbourne Cup weekend we carried out a perfect 'military exercise'. Six Adelaide staff packaged up tooling, fixtures, etc., for three semi-trailers and decommissioned five moulding machines for another two semi-trailers without being discovered by any Dandenong employee. These loads were arriving at our Adelaide facility before any of the employees or NUW knew what happened over that particular weekend.
We did win a battle with the NUW with the return to work (sic), however it is sad to think that until there are 'significant' changes to the IR system in Australia, the likes of the NUW, CFMEU, MUA, etc., will continue to legally or illegally use thuggery to achieve their aims, whatever they are supposed to be. The loss of 85 jobs at our Dandenong facility will add to the 20,000 Victoria lost in September last year.
The media, and in particular the Australian Financial Review, keep referring to 'Howard's far-reaching industrial relations reforms'. Ladies and Gentlemen I remain disappointed every time I hear this sort of description given for what I and many others believe are very modest changes to the IR system in Australia.
For our industries and employers to become globally competitive, we need a globally competitive IR system to operate in. I believe the Federal WorkChoices Act is the biggest missed opportunity for providing employers and their employees a globally competitive IR system. Given that the explanatory notes to the Act are almost the same number of pages as the Act itself means that IR practitioners in the Unions, Employer Associations and in private practice are guaranteed very lucrative futures, particularly while the AIRC remains and continues to try and remain relevant by making controversial decisions.
I am not sure how many times the word 'reasonable' appears in the Act or the soon-to-be-released regulations, but I am assured that a lot of money will be spent with lawyers trying to find out what the word means. I am also told that the word 'regulation' appears over 140 times in the new Act.
While the AIRC remains, there is no hope for employment contracts becoming simpler. However, if the Federal Government delivers on the proposed Independent Contractors Act and keeps it simple, then at least there will be an option for companies who wish to maintain employment with Australians who want to look after themselves and actually work. From my experience, there are many many people who want to make their own choice rather than be bullied by those with vested interests in maintaining their own power bases.
So Ladies and Gentlemen,
Is Australia a Free Country? I don't think so, unless of course you are a member of the privileged Industrial Relations Club.
I think I should join a group of 'standover merchants, thugs and other sleazebags' and look for a spot for the next election. When is your pre-selection coming up again Nick?
Seriously Ladies and Gentlemen, I am very excited by my next employment opportunity. It is to quickly grow an importing business of plastic mouldings from China and Vietnam for the remaining assemblers as quickly as I can.