Ovato looks to shed up to 300 jobs as pandemic bites

One of Australia’s largest printing and distribution companies, Ovato, is understood to be looking to make between 250 to 300 positions redundant as the COVID-19 induced downturn continues to slam revenue.

The company applied last week to the Fair Work Commission to have its Enterprise Agreement, which covers 850 of its 1300-strong workforce, terminated which it says is designed to decrease redundancy payouts across the business to ensure ongoing viability.

“We are focused on saving as many roles as possible through this process, but the impact is massive and unfortunately there is going to be a significant number of people affected,” Ovato chief executive officer Kevin Slaven said.

The Australian Manufacturers Workers Union Assistant National Secretary (Print and Packaging) Lorraine Cassin says 250 to 300 positions are slated for redundancy, but it remains to be seen which parts of the business these jobs will come from.

“In terms of job losses, we don’t have anything other than a lump sum. We don’t know where, which site or whether it involves site closures. We are not really sure exactly what it all means but I am assuming we will find out through the (Fair Work) Commission,” Cassin said.

“We’ve offered to negotiate with the the company, we have offered to bargain with the company but they have taken the avenue of terminating the agreement which is a pretty extreme reaction.”

Ovato CEO Kevin Slaven

Cassin also says Ovato’s application to have the agreement terminated would result in hundreds of workers having their wages reduced in line with the current award pay outlined in the Graphic Arts award.

Ovato has strongly refuted this claim saying the application to the Fair Work Commission is about reducing the size of redundancy payouts, not wages.

“They are not looking at varying certain clauses, they are after a full termination. So there is no trust obviously between the company and ourselves at the moment,” Cassin said.

“We are very disappointed that Ovato has chosen to take such extreme action against their workers when the workers have bent over backwards to accommodate the company.

“Workers have been constructively engaging with the company since negotiations started in October last year. When COVID-19 hit and company revenue dropped, workers were willing to reduce their working hours and take annual leave to keep the company going. This is a real breach of good faith.”

Slaven strongly denied any of Ovato’s actions are about reducing pay for staff.

“Any insinuation from the AMWU that we are looking to cut wages is simply wrong – we have categorically stated to the Union and delegates that we will not reduce base wage rates despite them being significantly above Award, our focus is on negotiating more appropriate redundancy scales so we can resize and save as many jobs as possible,” Slaven said.

“We have been very clear with our people and the AMWU. Our goal is to reshape our business to position ourselves to get through this challenging period, preserving as many jobs as possible. An essential part of that is being able to resize our business quickly, which the legacy conditions of our nominally expired EA currently make impossible.

“Like many businesses across the country, we have experienced a significant reduction in our revenue as a result of the COVID-19 pandemic – to give you an idea we are currently running at around 60% of where we were pre-Covid.

“JobKeeper and the recently announced extension has been of great assistance to us and our staff but it doesn’t alter the fact we will need to adjust the size of our workforce to survive as a smaller business through this period.

“Our nominally expired EA is reflective of a prosperous past, not the current economic reality we face and our current redundancy scales across all of our business need to better reflect this. We have already addressed this with or non-EA workforce and are seeking a similar approach with the AMWU members.”

Shaun Ryan, the AMWU delegate at Ovato’s Clayton site in Victoria, said workers were feeling angry and betrayed.

“We did the right thing by the company before JobKeeper became available and now they’ve turned around and terminated our agreement,” Mr Ryan said.

“Workers are feeling lied to. We did everything we could for the company when COVID hit. They shouldn’t be able to just terminate our agreement like this.”

The application to the Fair Work Commission comes a week after one of Ovato’s major clients, Bauer Media, axed eight of its magazine titles which in turn further reduced Ovato’s workload.

It has also been a tumultuous year for the German-owned Bauer Media which bought out Pacific Magazines in May and then was itself bought out by private equity firm, Mercury Capital, which also owns New Zealand’s heatset printer, Webstar NZ.

A directions hearing on the issue at the Fair Work Commission is set for this Friday.

The Real Media Collective, which represents the print, paper, publishing and distribution sectors, and includes both Bauer Media and Ovato as members, says flexibility is needed as the industry reels in shock of the coronavirus pandemic.

Citing figures from its recent Industry Insights survey, TRMC CEO Kellie Northwood said over 90 per cent of the industry had been significantly impacted by the virus.

“With over 90 per cent of our industry significantly impacted by COVID-19, now is the time to take heed from the Prime Minister’s comments earlier this year and ‘apply flexibility’, in all that we do to ensure companies can keep their doors open and recover from this difficult period,” Northwood said.

“That includes negotiating arrangements with commercial landlords, customers and unions. Our members have faced further hardship because the publishing and catalogue print sectors were stalled for weeks with catalogues not being produced and magazine titles placed on hold.

“JobKeeper and other government stimulus packages have assisted, however as one of the largest manufacturing industry employers we need all stakeholders to work with industry on a solutions focused approach.”

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