After the American subprime crisis vacuumed every last drop of liquidity out of the money markets, the buy-up and float strategy, widely touted by blue-suited pundits as Australian printing’s “one-two” knockout punch, suddenly doesn’t look so great, and the fallback plan appears to be good, old-fashioned rationalisation.
When Geon closed its Agency-Graphic World facility at Seven Hills in Sydney in June, around 90 staff lost their jobs, and a further number, including sales staff, were transferred to other Geon plants. Agency Printing, a 28-year-old company, had been a national showcase of print automation, and its closure was a shock, not least to its staff.
On May 20, at the grim hour of 6am, Agency-Graphic World staff were told about the closure and those who lost their jobs were provided with access to advice from Print Super and recruitment agencies.
While outlining the strategic benefits of the consolidation to ProPrint, Geon CEO Graham Morgan could not get around the fact that nearly 100 employees would find themselves in the unenviable category of being surplus to requirements as the sun rose that morning.
Morgan was hopeful that the normal “churn” of staff across Geon’s 33 Australasian businesses would provide openings for which those affected would be given priority consideration, where practicable.
“Every week people leave an organisation, so every time a position comes up in bindery, print or any facility, we will obviously go back to our people and see if they’re interested in transferring,” he said.
Fast-forward a few weeks to July 2 in Melbourne, another sombre day in the annals of Australian printing employment. Drago Zorec, managing director of 30-year-old D&D Global, and the maestro of premium quality printing in Australia, announced to a smaller, more intimate gathering of 12 staff at his Richmond premises – – a showcase in its own right, as the industry’s most quality-conscious, forward thinking and “boutique” sheetfed outfit – – that he was closing his doors. The reason? Soaring material costs and a drop-off in demand.
Around 60 people had worked for D&D Global at its peak, so departures were certainly not a novelty at the company. But Zorec, speaking to ProPrint after the closure, was emphatic that all staff who were employed there at the end have been provided with alternative jobs.
Ken Stenner, national employee relations and OHS services manager at Printing Industries, is tracking what he sees as anecdotal signs of a sharp rise in redundancies in the Australian printing industry over the past 12 months, even though the Australian Bureau of Statistics figures on terminations provide no damning evidence as yet.
Steve Walsh, secretary of the Australian Manufacturing Workers Union’s printing division, has been monitoring a rise in redundancies in printing over a period of years and attributes this to the private equity activity and the leap in mergers and acquisitions, which has accelerated the consolidation of companies.
“The major issue from the union’s point of view is the lack of consultation that sometimes occurs around redundancies. We will always have unfair dismissals, but from my experience, there’s not a lot of unfair dismissals linked in with redundancies.”
There is no qualitative research to show that WorkChoices had encouraged redundancies, although the scheme did cause a spike in unfair dismissals, he said.
How to handle redundancies
Michael Byrnes, a special counsel in the workplace relations group of Sydney-based law firm, Clayton Utz, tells ProPrint Australian companies “are doing head counts and looking at their structures and deciding on whether or not to downsize. That seems to be on their agenda, although they’re probably not at the execution stage yet”.
With the introduction and now partial rollback of WorkChoices, the scheme’s impact on Australians’ job security has certainly been in the headlines, but Byrnes makes the point that changes will not be introduced until January 1, 2010. “So anyone who speaks of job losses as a result of unfair dismissal reform is making an assertion that can’t be supported in law. And when the law changes, it will mainly affect small to medium-sized companies.”
Assessing how good Australian employers are in handling redundancies, Byrnes says “generally they are very good. For employees covered by awards and other industrial instruments, there are protocols and steps to be followed and employers generally try to be scrupulous, particularly larger ones.”
In order to minimise the chance of a redundancy ending in an unfair dismissal claim, employers need to make sure that all proper payments are made, including notice payments or payment in lieu of notice or severance payment, to give as much notice of the redundancy as possible, to consult with unions where these are involved, to ensure that any process set out in the relevant industrial instrument or contract is followed, and to ensure that selecting positions for redundancy is done in a non-discriminatory way, not on grounds of gender, race, religion or age. In the Australian workplace, Byrnes sees age as “a fertile area for claims that a redundancy has been discriminatory”.
Correct procedure
Australian industrial law is specific about how redundancies need to be carried out. For example, periods of notice must be followed, and these will depend on awards, Australian Workplace Agreements or contracts, generally up to four to five weeks.
If there are over 15 employees made redundant, employers need to check if they are obligated to report these to Centrelink. While there is no onus on employers who judge their companies to be financially unsound to consult prior to redundancies, there is an obligation to identify problems to employees ahead of time. There are protections built into insolvency laws that safeguard employees’ outstanding entitlements.
Industrial laws and awards vary state-to-state, but post-WorkChoices, federal law increasingly applies, as WorkChoices changed Commonwealth laws to cover all employees of “constitutional corporations”, a category that larger printing businesses, as proprietary companies, fall under.
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