Ovato employees prepare for end of an era

It is a common story across Ovato’s plant at Clayton in Melbourne.

The average age of workers at the plant is 45 to 50, and most have been there in excess of 20 years. Now with the printing and distribution giant working to have an elaborate restructure scheme approved in the NSW Supreme Court, 300 of the company’s staff face an uncertain future.

Persa Bajada, 52, pictured in the main photo with her fellow co-worker Pamela Alexander, are among them.

Persa has a long connection to Ovato. Her father worked there and she started as a graphics reproduction apprentice straight after high school. She even met her husband there.

30 years of service: Persa Bajada

But now after 30 years of service, it is all about to end with the Clayton site to be closed and 300 employees, including the majority of her colleagues, as well as some from other parts of the country to have their jobs made redundant.

The last few months have been incredibly stressful for Ovato’s employees and in many ways Persa is looking forward to finishing up.

More compassion and respect needed

She wishes more compassion and respect could have been shown to those who are about to lose their jobs, especially given so many of them have dedicated many years of their lives to the place.

The other factor that is causing high levels of stress is that staff face a lengthy wait to have their redundancy pay processed by the Fair Entitlements Guarantee (FEG) scheme.

She questions why a company – that is backed by the wealthy Hannan family – didn’t pay the redundancies itself rather than embark on the current legal process which is designed to allow it to put the company these staff are employed under into liquidation and thereby open the door to FEG.

The Scheme has now succeeded in its first two hurdles with creditors agreeing on Monday this week to accept a 50 cent in the dollar payment for outstanding bills as part of a plan for the future viability of the company.

Now all that stands in the way is a final nod of approval in the NSW Supreme Court, with a decision expected on Friday December 18.

So long as this is achieved, the Hannans and Are Media Pty Ltd (formerly Bauer Media), an entity related to private equity firm Mercury Capital, will tip in $35 million for the forward operation of the print business as it looks to return to viability in 2021.

The fact it is happening right before Christmas – all staff who’s jobs are being made redundant are due to finish on December 18 providing the court and creditors approve the Scheme – just adds to the disappointment.

“We know how much they have got publicly and God only know how much they have got that has not been revealed, so instead of just forking out the $30 million to pay us out quietly, why would they go to all this trouble in a deceitful manner?” Persa asked.

“Through the FEGS scheme we are effectively paying our own redundancies.

“To be honest, I can’t wait to get out of the place. I’ve been there 30 years and my dad was there before me so I have been involved in that place for my whole life. My ex-husband was there for 30 years.

“But it has got to the stage now that I just find it really heart breaking.”

Uncertain future

The staff have now accepted that their jobs will soon not exist, but the thought of walking out the door with nothing until the FEG scheme comes through in 2021 is a bitter pill to swallow.

“The only thing that upsets us now is with FEGS. We are all walking out with nothing so that has really upset us and it is a really big concern for a lot of people,” Persa said.

“I’ve had to defer my home loan and we’ve all had to do certain things, but it is very horrible how it is being done right before Christmas.

“We wonder why they couldn’t have just kept us on JobKeeper for a little while longer. There is absolutely no compassion.”

Persa said the AMWU has been trying to persuade Attorney General Christian Porter to try and have the FEG redundancy pay pushed through quicker, but she is not sure where that has gotten to, if anywhere.

A spokesman for Ovato told Sprinter some redundancy pay could be made earlier, but pointed out this will be in the hands of the liquidator to approve and coordinate.

“We have initial indications from our advisors that a proportion of employee entitlements can be paid on the date of the redundancies,” the spokesman said.

“We are exploring other avenues of potential financial assistance to bridge the gap between redundancy and FEG payment of the balance of the entitlements.

“At this stage the gap will be no longer than eight weeks.

“We are also committed to doing everything we can to assist those exiting the business and we will remain supporting these employees including providing comprehensive outplacement support and will assist in FEG paperwork and applications.”

AMWU delegate

Persa is a AMWU delegate and this has allowed her to sit in on meetings with management and gave her more indepth insight into what has been going on.

Persa says it has been suggested that staff may be able to access 10 per cent of their redundancy pay before Christmas if they urgently require it, but some are concerned this might have a negative tax consequence.

“A lot of us have opted that if we don’t have to do that, we won’t,” she said.

“It has been very hard lot of months. I am a delegate for the union and I’ve been fully involved and I almost had a breakdown the other day so I thought no, I need to step away from everything for a little while.

“I just want to walk out of there and feel good about myself and move on.”

The Australian Manufacturers Workers Union recently brokered a deal with Ovato that reduced redundancy pay through the creation of a new Enterprise Bargaining Agreement.

Australian Manufacturers Workers Union assistant national secretary (print and packaging) Lorraine Cassin said the changes to the EBA reduced the redundancy bill from $30 million to $18 million.

The new EBA includes reductions in redundancy pay from an un-capped four weeks pay per year of service, to two weeks capped to 52 weeks.

The plan is outlined in a 600-plus page document that was submitted to the ASX, which Ovato CEO Kevin Slaven said is the only way to ensure the company’s survival and the continued employment of 900 staff.

What Ovato says

Ovato says the restructure plan offers the best outcome for the viability of the company going forward and the remaining 900 staff.

A spokesman for Ovato says the $35 million that is being put into the business by the Hannan family and Are Media (formerly Bauer Media) will clear much of the company’s debt and allow it to stem the big losses and return to profitability, and keep 900 workers employed.

The company of the years has spent significant amounts of money on redundancy payments and says for the future viability of the company, this path was really the only option.

CEO Kevin Slaven said the alternative to this process would have been much worse for staff.

Ovato CEO Kevin Slaven

“The alternative to this restructure  is all 1300 Ovato employees losing their jobs,” Slaven said when the arrangement was first announced.

“That is clear from the independent expert’s report which is available for everyone read. I am sure the alternative is not one that the union would prefer.

“The entitlements from FEGS  are exactly the same as those that in the Enterprise Agreement negotiated this year. The liquidator will help employees access FEGS as soon as possible.”

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3 thoughts on “Ovato employees prepare for end of an era

  1. Well done Persa, i think everyone wants out now i feel sorry for the people left behind,as these owners and managers of this company don,t give a crap about their workers or their feelings. Its only now when we are about to be booted out that anyone from management or HR has even bothered to come to Melbourne. Not even throughout this whole COVID thing have they been interested if anyone was suffering. I expect while we are trying to pick up the pieces of our lives they will be in their million dollar mansion sipping champagne and having a right old Merry Christmas. Every Dog has its day.

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