Rage, rage against the factory closure

On 1 May 2017, May Day – International Workers’ Day – Australian dairy giant Murray Goulburn announced that they were shutting factories across Victoria and Tasmania, slashing jobs and devastating communities.

Faye and Julie, two National Union of Workers delegates working at the Edith Creek site in North-West Tasmania, shared their responses to the closure with me. Both relatively newly elected delegates, they found themselves in the middle of a crisis.

Faye had been working at the factory for nearly ten years as an operator. Her normally balanced manner was shaken upon hearing the news of the closure. ‘I felt a bit stuck,’ Faye said. ‘It seemed to drag after we got told. And you dragged yourself to work every day. It was hard.’

Julie, a natural leader on site who cared for and looked out for her co-workers, had been working at Edith Creek for over six years as a storeperson and operator. Julie remembered, ‘At first, I was devastated for everyone else, but for myself I was like hell yeah. You want out of somewhere but then it sinks in and you want back in. It’s the outcome of not having control. Basically devastation… We knew there was a ready milk supply in this area, we knew it was expensive to run, but the profit covered that.’

From a production point of view, the decision did not make sense.

‘We packed the hard stuff that no one else could pack,’ continued Julie.

Edith Creek was a modern factory with up-to-date equipment factory. Workers in sterile white uniforms and hairnets would quietly go about their work between operating machines, automated forklifts and robotic packing arms. About the only manual process left for a highly knowledgeable workforce was the lifting of sacks of ingredients for flavoured dairy products. This was the future Australian industry was supposed to have.

From a financial point of view, however, the decision made complete sense. Edith Creek was the cheapest factory to close. Being a relatively recent acquisition to the Murray Goulburn network, the workers were not on the same enterprise agreement as their Victorian co-workers. This meant that the Edith Creek workers were entitled to lower redundancy payments. An Edith Creek worker accrued only three weeks payment per year of service compared with four weeks for an equivalent Victorian worker. Further, many Edith Creek workers spent years engaged on a labour hire basis, until they joined the union together, which meant many workers’ years of service were not included in any redundancy payments. In addition, Edith Creek redundancy payments were capped at forty weeks, less than half what Victorian workers could expect to receive. Finally, all of this was calculated on the basis of an hourly wage which was a couple of dollars less than other Murray Goulburn sites.

Getting rid of the Edith Creek workforce, therefore, was a solution to a financial problem.

However, Murray Goulburn was in the middle of a financial crisis of its own creation. It had borrowed too much, pushed farmers too far in order to make a profit, and introduced shareholders on the promise that their investment would fix their problems. While trying to bring some stability back, Murray Goulburn wreaked havoc on the lives of its workforce. In 2016, it sacked 200 people from its head office, but this measure was not enough.

The once large and profitable cooperative missed an opportunity by not involving its broader workforce in a plan to bring it out of crisis. It is a common practice for worker cooperatives going through temporary periods of crisis to reduce hours of operation for a period of time, as opposed to permanently cutting jobs and disrupting people’s lives. Instead, Murray Goulburn went down a path of demutualisation, which ultimately led to its demise.

A farmer cooperative with corporate investors, Murray Goulburn acted much like many other traditional corporations with respect to its employees. In order to help pay its debts, the closures of factories in Edith Creek in North-West Tasmania and Rochester and Kiewa in regional Victoria were announced. At this stage the intention seemed to be consolidating the work from these three factories into Murray Goulburn’s remaining network.

For many of the workers at Edith Creek it made no sense to close a profitable factory rather than selling it to a new owner. As Julie questioned, ‘Why not sell it as a going concern? It didn’t make sense to close it.’

Faye pointed out, ‘we got told all the time it was making a profit.’

Clearly, there was a conflict between Murray Goulburn’s creditors looking to get as much as possible as soon as possible from the dairy giant, and the interests of more than 100 workers, their families and their community who relied on the income from the Edith Creek dairy factory.

It was a stressful situation, Julie noted. ‘We hadn’t even been delegates for that long and all of a sudden we were thrown into the deep end.’

Later in May, I met with the site organiser Jill, delegates and workers. I attempted to inject both some urgency into the situation by pointing out that while it was only May we would need to act quickly to look after everyone, and some hope by focusing on two claims we could all campaign for. The first being to keep the factory open, or at least sell it as a going concern, and the second being to improve the redundancy provisions so people could stay in the community longer.

‘I remember worrying that the members didn’t take to Godfrey. At the end of it some of them thought, who the hell was that guy? Workers were saying we had plenty of time,’ Julie remembered.

But with a general view that things couldn’t really get much worse, and a plan was better than no plan, workers started to campaign for their futures.

The plan was to start bargaining for a new enterprise agreement between May and the expected factory closure date, so that Murray Goulburn could be pushed to put the factory on the market and agree to better redundancy payments. An extra member stepped up to be a delegate, other members stepped up to help the delegates, and non-members stepped up to join the union.

The plan, however, was not without opposition.

Julie observed how her co-workers were ‘getting beaten down by management’s BS’ and expressed surprised at the underhanded tactics the company was using to hold things up. She recalls the company going to the Commission, and workers being forced to write out stat decs and sign and prove the smallest things. ‘It was absolutely ridiculous,’ she said.

Meanwhile, in response to Murray Goulburn’s announcement of the Edith Creek closure, the Tasmanian Government announced the formation of the Circular Head Regional Economic Development Working Group chaired by State Liberal MP Joan Rylah, and allocated $1.5 million in funding to the working group to be spent on job opportunities in the region.

The most immediate government assistance the workers experienced was support in building their resumes. ‘For someone who never had a resume and needed one, it was nice to have one, but it could have been better,’ Julie said.

‘I don’t think the resumes were any good. I got my niece to do mine,’ replied Faye.

Julie added, ‘I brought my resume home and showed my daughter. She said, “Mum, this is shit.” She sat there, picked holes in it and rearranged it.’

‘They could have at least spelled properly,’ retorted Faye.

As part of the funding package, workers at the factory were also offered skills training. Its delivery was problematic.

‘The training depended on who you were, where you were, and how far up the management’s arse you were. There was no accountability, no information,’ said Julie.

‘I think in the end nearly everyone did the first aid course. But I missed out every single time because I only heard about it once they were doing it. There were office people doing forklift licenses. People on the floor needed them but they weren’t able to because the company needed them to produce,’ continued Julie.

For Faye the experience was the same. ‘I never got off the floor at all because I was production. I didn’t do my first aid course until the week before we finished and it was crammed in. We did a two-day course in six, seven hours.’

Faye summed up the training process in one word: ‘bullshit.’

Workers had $3,000 worth of training funding to access once the factory closed down. Faye reported she’d only spent $95 of it, and her experience was pretty common. She said accessing funding was confusing and it wasn’t properly explained to workers.

For Julie, from the funds remaining from the initial $1.5 million, the rest of what workers saw amounted to glossy pamphlets and a job fair.

Julie said, ‘I don’t know if anyone got a job through that. Not to my knowledge. I think basically the resumes are about all anyone got out of it.’

On 3 July, the union wrote to Joan Rylah MP in her capacity as Working Group Chair, requesting funding for a ‘feasibility study into the future of the Edith Creek site.’ It was an attempt to get the money set aside for the soon-to-be-unemployed spent in a more meaningful fashion. Murray Goulburn was on the public record stating that while it would close the factory, it was not yet in a position to consider future options for the site. It was still working through what machinery it wanted to ship back to Victoria.

In other words, it knew it was dumping the workers but it was not yet ready for them to find a new partner.

The union’s request for a feasibility study aimed to get potential buyers and the necessary machinery needed to maximise local, secure jobs on the public agenda. The feasibility study would give the workforce and the community the information it needed and the time to act to secure the best possible future for Edith Creek and Circular Head.

Just one month later, after Murray Goulburn had gone on the public record that the Edith Creek site would not be mothballed, Rylah wrote back confirming that a feasibility study was premature as the company had provided ‘a commitment’ that the site would ‘be sold to ensure a maximum return to its shareholders.’ The return to the workforce and the community remained a secondary and unanswered question.

Julie was suspicious of the political class’ contribution to her co-workers’ welfare. ‘I don’t think they have a good idea about how the people work and what they need. Just saying jobs and tourism is not realistic. Tourism is seasonal. How can you go from well-paying jobs to seasonal work? As far as politics goes they don’t get my vote.’

The struggle for a secure future for workers at the factory continued.

In early October, to build up support for workers as they fought for their future, the union hosted a community meeting in the nearby town of Smithton. State parliamentarians, including Joan Rylah MP and the local Labor representative Shane Broad MP came along, then-Federal Senator Jacqui Lambie broadcast the meeting live on Facebook, Unions Tasmania were there, and interested members of the local community came to lend their support, as well as group of workers from the factory.

Towards the end of the community meeting, one worker asked to get up and speak. He had always refused to join the union, let alone participate in any union-related activities. This time, however, he had turned up to the meeting and decided to speak up. Fighting off tears he recounted how the closure of the factory had impacted him, how he had to sell off the family home and leave the area. Faye gave him a big hug and told him he did well.

The delegates were disappointed that more of their co-workers had not turned up at such a critical time in their fight.

‘Why are we fighting for people when they aren’t going to fight for themselves? It took me a good week and a half to get the pissed-off feeling out of the system,’ Julie said.

In late October, after months of waiting for a listing, arguments, re-listing and counter-arguments, the Fair Work Commission finally found that a majority of workers at Edith Creek wanted to bargain for a new enterprise agreement. This gave the workers a very narrow window with which to meaningfully threaten industrial action.

Soon after, in early November, Murray Goulburn management put an offer to the union of an increase in the total redundancy payment by $4,000 to each worker, in the form of a retention payment. One campaign goal had been met – increasing the redundancy payments to keep the workers together for longer. Whether this would be enough was up to the workforce.

‘All of a sudden a lot of them wanted to keep fighting,’ said Julie. There was a debate about whether they would fight for their future after many workers didn’t attend the community meeting, but a win on increasing redundancy payments seemed to give people hope that they could affect change. The discussion kept going, and the workers decided that they would accept the offer for the increased redundancy payments.

For Julie, this was a real highlight: ‘I was really determined to get something for people and we were running out of time and then thank goodness we did!’

The three factory closures were not enough, and later in 2017 Murray Goulburn put itself up for sale. All the suffering and stress seemed pointless. Edith Creek could have been sold as part of the wider Murray Goulburn network.

The campaign for a new agreement had not resolved the question of finding a new buyer for the factory. It was at this time that the union called on the State Government to buy the factory in order to manage the sale process. The call got a lot of attention, and the union was criticised by the State Government for ‘politicising’ the issue.

Faye and Julie were involved in conversations with both Murray Goulburn management and the Tasmanian State Government. Reflecting on the process, Faye says, ‘I didn’t really trust anyone. The higher up you are, the more you’re listened to. Everyday workers are not listened to all.’ Julie adds, ‘[management] didn’t keep us well informed. Announcing on the second-last day that it was sold shows how secretive they were. They would’ve known well before and it wasn’t a coincidence.’

Murray Goulburn and Dutch Mill announced the sale of the factory on the second last day of operations at Edith Creek. No details were released as to what would be made at the factory, how many workers would be required, what the quality of the jobs would be or when work would start. The union agreement will not apply to the new owners, so workers now face the prospect of a large cut to their wages and conditions.

On 30 November, workers drove out of the factory under Murray Goulburn ownership for the last time. They knew that the factory would have a future but they didn’t know what that future would look like or whether they would be part of it.

Dutch Mill has to date refused to talk to the union about Edith Creek’s future.

So how did being union help during the campaign? ‘Being in the union gave me a sense of safety,’ says Julie. But there were some frustrations. ‘A lot of people don’t understand that the group is the union. They see union officials as the union. We need to drum it in people’s heads that they are the union.’

Julie reflected on the closure period at Edith Creek and the work of the union: ‘there would not have been a retaining bonus that’s for sure. There wouldn’t have been a search for a job day. Basically, if we weren’t in the union we wouldn’t have got as good a deal as we did get. I suspect it would’ve been worse.’

‘We just need that little push,’ concluded Faye. It was a comment that could apply to many other workplaces around the country.

If Julie could send a message to every worker in Australia, she’d say that unity is strength. Julie was approached by the factory manager after the campaign, and asked whether she’d be in a union again. She said, ‘I didn’t even hesitate – yes. He said it because he is a non-union guy and he sees himself as a good and fair manager. I said yes, I would be in the union because not all managers are good and even if you have a great manager you don’t know how long any one person is going to be there.’

Faye agreed, ‘I would join the union any day.’


Image: National Union of Workers representatives and workers outside Murray Goulburn’s Edith Creek factory / Helen Kempton – Weekly Times

Godfrey Moase

Godfrey Moase is an Executive Director, United Workers Union. He’s previously written for the Guardian, Overland, Jacobin and New Matilda.

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