What, no ice cream this summer? And what does that have to do with HR?



written on October 30, 2017

As the ice cream war at Streets gathers pace, HRM looks at the Fair Work Commission’s interventions in scrapping enterprise bargaining agreements – and the lessons for employers.

Forgive the pun but the dispute between parent company Unilever and workers at the Streets ice cream factory in Minto, NSW has reached meltdown. Unilever has applied to the Fair Work Commission to terminate the current enterprise agreement, which the unions say could leave 140 workers with a pay cut of up to 46 per cent.

In retaliation, the unions have launched the ‘Streets-Free Summer’ campaign.

“We are calling on every Australian to stand up for fairness. If Streets won’t do what’s right, we won’t take a bite,” said AMWU NSW Secretary, Steve Murphy.

ACTU Secretary, Sally McManus, accused Unilever of exploiting the “broken” bargaining system.“They couldn’t force these massive cuts through a fair ballot and are now opting for the ‘nuclear option’ of agreement termination to blackmail these workers,” she said.

In the war of words, general manager of ice cream at Unilever Australia, Anthony Toovey, says: “If anyone has their finger on the nuclear button here it is the union and all a boycott will do is hurt workers and local manufacturing.”

The company has said it wanted to keep making Streets locally, but that production at the Minto factory currently lacked the flexibility needed to run a seasonal business.

“We cannot continue with the current situation as it’s simply not sustainable,” Unilever stated“It’s currently almost 30 per cent cheaper to import a Magnum Classic ice cream made in Europe than to make the same ice cream at Minto, even when you include the 16,000 kilometres of frozen transport.”

Unilever rejected the claims that it would, or may, reduce employee wages by 46 per cent.

“If the FWC decides to terminate the agreement, we have already committed to preserve a range of benefits under the existing EA – including maintaining rates of pay – until 30 April 2018 (or earlier if a new agreement is reached) while we have discussions with employees and the AMWU to reach a mutually agreeable solution,” it said.

The union campaign comes on the back of a number of successful consumer boycotts, including that of Carlton and United Breweries last year. Victoria’s AHRI Employee Relations/Industrial Relations group convenor, Nick Ruskin, says it’s a tactic that employers will need to be more wary of in future.

“Reputation is a very big thing in the marketplace at the moment. It’s all about reputation. We used to have brands that were so strong and solid that their reputations were harder to impact,” says Ruskin, who specialises in labour relations and employment law and is a partner at K&L Gates.

On the other side of the ledger, he notes that employers have every right to terminate agreements in the event of a stalemate once an agreement has expired.

“It’s becoming something that companies are more ready to do because the Commission has approved it in a number of circumstances – employers are follow precedent and saying: ‘Well if the FWC can allow us to do it, we will use it as a tactic in bargaining’.

“It’s a perfectly legitimate tactic to use – others have successfully used it before, and others have failed to use it.”

Last year, the Fair Work Commission agreed to scrap workers’ EBAs at the Griffin Coal mine that was struggling financially. The decision affected around 70 workers in south-west WA and meant wages could be cut legally by around $50,000 by reverting to the Black Coal Award, after the company argued it was impossible to turn a profit.

And at James Cook University in September, the administration threatened to scrap its existing enterprise agreement if staff did not vote ‘yes’ to a new proposal.

The enterprise bargaining battle comes after the Fair Work Commission ruled that Murdoch University in WA was allowed to tear up its existing agreement after stalled discussions with the union over pay.

Ruskin says that, as the economy gets tighter, we’re likely to see more conflict when it comes to achieving bargaining outcomes. “Everyone will be using the tactics available to them to reach an enterprise agreement,” he says.

“Taking industrial action is one tactic which can be legitimately used, taking employer response action (locking out) will be used, terminating an expired enterprise agreement will be another tactic.”

Photo credit: James Cridland via Visual hunt / CC BY

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5 thoughts on “What, no ice cream this summer? And what does that have to do with HR?

  1. This article sites the likelihood of more conflict in the bargaining arena ‘as the economy gets tighter’. That phrase is overused and to my mind, mendacious. Sure, tightening is occurring at some levels, and we can see the impact for average Australian workers, as buying cheap labour from overseas becomes more prevalent. At the same time, executive TRP growth has accelerated significantly over the decades since the early 90s. Do we really want to be a society of haves and have nots? Look around the globe and see what that looks like…and then decide.

  2. See, I read AMWU and immediately support the company because, based on my personal experiences inside the AMWU EBA negotiation room, I know how they operate, and I am fully aware of the fabrications and exaggerations that they spout in order to get their way.

    I personally witnessed representatives and delegates of AMWU refuse to go ahead with an EBA until a clause was included that only benefitted the delegates, and then when the Company would not agree to that clause, the AMWU went to the chapel meetings and told the staff that they were refusing to sign because the company was trying to rip the staff off and take away their entitlements, but don’t worry, the AMWU would fight for the to make sure they got what they deserved!

    They then encouraged all the staff to vote to strike, bullied the contracted staff to become members and them scare them into agreeing to strike (by telling the mostly English-as-a-second language casuals that they’d be fired if they didn’t), and harassed anyone who’s voted no to striking (in an allegedly “confidential” vote), all for the sake of one clause to allow delegate to basically be away from their job for as long as they wanted, whenever they wanted, and without have to check with or advise their supervisor first.

    Uh… right. sure. You’re fighting for the “employees” by refusing to agree to an EBA until a clause that gives your delegates more time away from their jobs is included. That’s absolutely fighting for their entitlements! And bullying and harassing people is without question fighting for your members.

    Seeing AMWU attached to this campaign makes me immediately wonder what shadiness they’re up to this time and, even without any further clarification, I’ll be ensuring my freezer is stock all summer with a variety of Streets goods.

    Whatever the “truth” about the negotiations is, the reality is this – if a business wants to continue operating, it needs to remain profitable. If it is cheaper to got the goods manufactured overseas and shipped here (from the other side of the globe in refrigerated freight) for sale, then the reality is that the business here is not profitable and needs to adapt or fail. At some point common sense needs to prevails and the Unions need to realise that, if they keep up their stubborn and arrogant practices from the boom times, Australia will continue to lose manufacturing overseas and then there will be no jobs here and ultimately no need for Unions. At some point Unions need to start negotiating in a way that also ensures that the business can continue to operate locally so that they can continue to employ people locally.

  3. Well said, Jill.

    The problem that we have is that our IR system is adversarial and employers and unions don’t know (or want) to change their ways and work in partnership.

    Your point about executive TRP growth is especially relevant – are they also taking cuts in rem to support the cause?

    And, by the way, for AHRI’s benefit, Fair Work Australia does not exist – it became the Fair Work Commission years ago and it is disappointing that such factual errors occur in AHRI publications.

  4. SG, you have hit the nail on the head. There are far too many militant unions engaging in the most vile forms of behaviour, which is being protected by the ALP/Greens and the media. These are the same unions that have the gall to promote anti-violence programs such as White Ribbon day. The hypocrisy of these neanderthals and the politicians that enable them makes a mockery of the integrity and lofty values they claim to espouse and reflects badly on the lack of courage in the media and public figures and institutions who refuse to challenge them. Our IR system is a mess. Rudd, Gillard and Shorten unwound decades of IR reforms and have taken us back to the 70’s (by the way, that’s not my words: I am just echoing comments of prominent ALP politicians and unionists such as Martin Ferguson, Graham Richardson, etc). Until balance is restored in IR legislation, we will keep seeing the sort of scenarios playing out across Australia as depicted above

  5. Firstly a declaration. I know nothing about the specific details concerning the thrust and parry of this dispute. However I do at times speculate if employers have created the industrial relations system they deserve. Initially, the balanced concept of enterprise agreements in Australia was that as an outworking of negotiations there would be [1] improvements in employee benefits and [2] trade-offs conceded by employee/unions to boost productivity/reduce costs to ensure businesses remain competitive/viable. I have a feeling that over time productivity improvements/cost offsets have, for whatever reason, not been pursued as they should have. Whether this is because the “operations” side of the business don’t want to rock the boat, so they can in a misguided way remain “chummy” with their employees/unions, or, dare I suggest it, as a consequence of a failure by HR to push hard but sensible workplace issues during the course of negotiations. I also wonder if these days communications to employees is often conducted in a more superior way by unions than by the employers, who should be much better placed to get a whole range of messages across to their own employees about business issues. Employers are in a unique position to utilise a number of different mediums these days to get messages across to the workforce. Messages which can be backed up by factual data, illustrating how unrealistic expectations about wage increases and unwarranted improvements to other benefits, can adversely impact on profitability and employment prospects. Maybe it’s time for management to become more innovative in the way they deal with THEIR employees!

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