Similarly, we have carefully considered the objectives of the parties and interveners as identified in the proceedings before Commissioner Harrison and in the proceedings before us. We note that there is a large measure of agreement as to what these objectives should be and to the steps that should be taken in an attempt to attain them. We endorse the following important objectives of the parties:

. an improvement in dispute settling procedures;

. a reduction in industrial disputes involving work stoppages;

_______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 3

. attainment of greater efficiency and productivity through improved management practices and identification and removal of inefficient

. development of a highly skilled and flexible workforce to assist in structural adjustment and to provide workers with access to more varied, fulfilling and better paid jobs, including;

• provision of greater continuity and stability of employment;
  

• promotion of  multi-skilling, broadbanding
  

and a reduction in demarcation barriers;

• ensuring that work classifications and functions
  

and basic work patterns and arrangements meet the competitive requirements of the industry;

• encouraging appropriate training and retraining;
  

. encouraging the implementation of practices consistent with the competitive requirements of individual enterprises; and

. simplifying and rationalising award coverage and the content of awards of the Commission including making the award and classification structures more relevant and to provide appropriate minimum rates of pay based on a proper assessment of skills and responsibilities.

All parties and interveners acknowledged that change was necessary and desirable and all parties acknowledged that negotiation and consultation were necessary to achieve this change. Various suggestions were made to improve the negotiating climate and many proposals for change were made, as can be seen from Commissioner Harrison's report.

The employers put a substantial amount of material before the Commission which they claim shows that the industry is hampered by constraints and impediments and faces a crisis. The crisis is described in terms of declining

competitiveness, poor productivity and increasing international and domestic competition. It was claimed that small country operations are now increasingly supplying the domestic market because the large companies are unreliable and expensive. Uncompetitive employment conditions and the cost of lost time were said to be responsible for this shift. Much of this material was directed to the processing sector of the industry.

Many practices in the industry are said by the employers to impede productivity, these include the contract of employment and the existence of tally systems. However, the material was equivocal. For instance, while it was submitted by the Meat and Allied Trades Federation of Australia (MATFA) that to achieve greater productivity tally systems should be abolished and time work substituted therefore, there was no unanimity between employers about this proposition. A substantial number of the employers in the processing sector wish to retain tally systems. Further, MATFA also argued that there was room for a consideration of payment systems; but of a different nature to those that now exist. Similarly although some employers advocated a move to weekly employment, there is not a universal desire for the abolition of daily hire.

4 INQUIRY INTO THE MEAT INDUSTRY

It was also observed by Macquarie Consultants, engaged by MATFA, that "the total meat production industry from farm to table is on the whole, very efficient".(7)

It is also apparent from the submissions of all the parties that many of the problems to which they referred should have been the subject of consultation and negotiation between the employers bound by the numerous awards of this Commission and The Australasian Meat Industry Employees Union (AMIEU), pursuant to the National Wage Case decisions since 1987. However, it appears to be accepted by all concerned that, except in some cases at an enterprise

level, the processes and procedures for consultation and negotiation are unsatisfactory and, where procedures exist, they are not properly used.

Furthermore, it is our conclusion, which appears to a significant extent accepted by the parties, that there has been little application of the principles contained in the National Wage Case decisions since 1987. In particular:

. minimum rates have not been reviewed to ensure that classification rates and supplementary payments bear a proper relationship to classification rates and supplementary payments in other minimum rates awards;

. the list of award respondents has not been updated and/or rationalised;

. the number of awards covering any one employing body has not been rationalised;

. no fundamental examination of restrictive work and management practices "to identify areas of inefficiency and to develop means to overcome them" has taken place;

. multi-skilling and broad-banding has not occurred;

. work classifications, functions, basic work patterns and arrangements have not been discussed or varied;

. skill-related career paths which provide an incentive for workers to continue to participate in skill formation do not exist;

. appropriate relativities between different categories of workers within the award and at enterprise level are not in place;

. few facilitative provisions or award modernisation provisions are included in the awards; and

. no properly designed and accredited skill training processes exist.

It must be said at the outset that the Commission cannot solve all of the industry's problems. For instance, there were numerous matters raised by the parties and interveners which were outside award provisions. These included both matters of an industrial relations nature which may be described as over-award arrangements, and matters which, although linked to the efficiency _______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 5

and productivity of the industry and the welfare of employees, were not of an industrial relations nature. On matters properly within its jurisdiction the Commission is available to conciliate or arbitrate consistent with its statutory requirements when this is necessary or desirable; neither arbitration nor direct action should be used as a substitute for reasoned discussion between the parties.

We have given careful consideration to all of the evidence and submissions put by the parties. In deciding on the most appropriate approach

we have taken into account a number of issues including:

. the lack of general application of the principles contained in the National Wage Case decisions since 1987;

. the stated commitment of all parties to the objectives referred to earlier herein;

. the lack of factual information about the actual effect on current

working arrangements of adopting some of the prescriptive changes sought by MATFA especially in respect of tally systems and daily hire;

. the failure of all parties to address by way of merit argument the

case for substantive award variations involving the totality of conditions and the introduction of the changes sought;

. the need to ensure that the federal awards remain relevant;

. the acknowledgement by the parties for the need for change and that negotiation and conciliation are necessary; and

Given all of the foregoing considerations we have decided that the most appropriate course is for the Full Bench to provide a framework within which the parties should endeavour to reach their own agreements. The responsibility for the successful application of the necessary changes must be borne by the parties. It is against this background that this decision has been reached.

We now turn to consider the framework that should apply.

On the last day of the proceedings before the Full Bench, the Commission raised the prospect of the industry being more appropriately covered by awards of State tribunals. A case can be made out for this proposition, although no party or intervener supported the suggestion.

. State awards are applied to the industry in Western Australia and Tasmania and to a significant proportion of it in New South Wales;

. even in the federal jurisdiction, awards have predominantly been

developed and generally have been made on a geographic or enterprise basis;

6
INQUIRY INTO THE MEAT INDUSTRY

. the union and employers act on a State basis and this means there is little uniformity, except in the retail trade;

. problems of jurisdiction in the federal system are immense particularly given the legalistic approach generally adopted by the parties. In particular:

• a major area of
  

disputation which regularly arises is whether there is a dispute within the meaning of the Industrial Relations Act 1988;

• some companies have endeavoured to avoid coverage by federal 
              awards by the use of devices
  

such as resigning from MATFA or by otherwise changing arrangements in a way designed to avoid

. the jurisdiction of the Commission is limited by the nature and

extent of the industrial disputes which have been created; and

. work stoppages are predominantly of a State or local nature.

We have decided on this occasion that there should not be a cancellation of relevant federal awards because no party or intervener supported the suggestion, and because the matter was not fully debated before us. Further, we believe that the conclusions we have reached will improve the situation so far as the aforementioned issues are concerned. The parties should consider what steps are available to them to assist in overcoming the problems to which we have referred. We make it clear however, that a return to the State system remains an option.

We are satisfied that there needs to be a rationalisation of the number of awards in the meat industry and that there should be an appropriate number of minimum rates awards with provision for enterprise agreements. In particular there should be a rationalisation and reduction in the number of

The retail and smallgoods sectors of the industry were not addressed comprehensively in the proceedings. However, it was clearly indicated that the nature of the issues which concern the AMIEU, the employers and the interveners in the processing sector are fundamentally different to those which exist in the retail and smallgoods areas. The various sectors may require different classification structures and different provisions in relation to hours of work. In these circumstances we have decided that there should be three minimum rates awards covering the retail, smallgoods and processing sectors,

respectively. Allied with those three awards we contemplate individual employers entering into enterprise agreements pursuant to section 115 of the Act and the October 1991 National Wage Case decision(8).

In our view, the minimum rates awards should have the widest coverage of employers that the existing disputes in the Commission will allow. There is a need for the parties to discuss the scope of the proposed minimum rates awards with a view to reaching an agreement in respect of proper limits of its

intended coverage. _______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 7

It would be advantageous in situations where there is a history of employers seeking to avoid award coverage, for there to be a State award with common rule coverage; preferably a counterpart award to the relevant federal award. This is however clearly a matter for the union and the relevant State industrial tribunal.

We are satisfied that the awards which apply in the meat industry do not, generally speaking, meet the requirements of the industry and that more appropriate classification structures should be adopted.

Further, the awards contain irregularities in rates of pay; employees performing similar tasks receive different rates of pay and inequitable relationships appear to exist between various classifications of employees.

These factors have caused feelings of injustice and have led to industrial discontent.

There is an urgent need to ensure that classification rates and supplementary payments in the minimum rates awards are not only internally consistent but that they also bear a proper relationship to classification rates and supplementary payments in other minimum rates awards of the Commission. The starting point for such an assessment is set out in the August 1989 National Wage Case decision as follows:

"Subject to what we say later in this decision, we have decided that the minimum classification rate to be established over time for a metal

industry tradesperson and a building industry tradesperson should be $356.30 per week with a $50.70 per week supplementary payment. The minimum classification rate of $356.30 per week would reflect the final effect of the structural efficiency adjustment determined by this decision.

Minimum classification rates and supplementary payments for other classifications throughout awards should be set in individual cases in relation to these rates on the basis of relative skill, responsibility and the conditions under which the particular work is normally performed. The Commission will only approve relativities in a particular award when satisfied that they are consistent with the rates and relativities fixed

for comparable classifications in other awards. Before that requirement can be satisfied clear definitions will have to be established."(9)

We also emphasise that, as the fixation of supplementary payments is an attempt in part to assist lower paid workers, there needs to be a complete and total commitment to the absorption of over award payments up to the level of

any supplementary payment. Further, it must be accepted that this exercise may lead to relativity changes and should not give rise to claims for the restoration of historical relativities.

Proper career structures and rates of pay, consistent with the various National Wage Case decisions, should be included in each of the minimum rates awards. The awards should be based on time work and each classification level should contain a description of the level of skills required and should recognise that an employee is required to carry out such work as the employer _______________________________________________________________________________

8 INQUIRY INTO THE MEAT INDUSTRY

may reasonably require. For the purposes of calculating the relevant rates and relativities the butcher should be recognised as the tradesperson but we reject both the relativities proposed by the union and those proposed by MATFA. The final classification structure should be as efficient as possible and provide

appropriate rewards for employees or the basis of the skills they are required to use. In this context we note the agreed recommendation of the Australian Meat Industry Tripartite Overseas Mission that:

"[in] the restructuring of awards in the meat industry, classifications should be skills based. The competencies established as necessary to operate at each classification level should be assessed on standards developed by the parties in the industry and endorsed by the National Training Board."(10)

Further, we would prefer that classifications covering all of the employees in the industry should be embraced in the classification structure to be developed if the relevant jurisdiction exists.

In all the circumstances we have decided that the appropriate course to follow is to refer the matter of the classification structure back to Commissioner Harrison for him to hear and determine.

As previously stated, employers claimed that a move away from the tally system to time work in the processing sector would lead to improved productivity and efficiency. We have already decided that in principle sufficient flexibility should be allowed in awards of the Commission to allow enterprises to determine their working arrangements. We are prepared to adopt this approach to the application of tally systems in the industry for a number of reasons.

First, tally systems in existing awards are in need of review and the incidence of plant arrangements outside the award system is high.

Second, a significant number of operators in the industry have indicated that they wish to continue to conduct their operations with a tally system.

Third, we believe that neither the parties nor the Commission should stand in the way of employers and employees willing and able to implement time work.

Further, we are satisfied that employers and employees should be

encouraged to focus on their individual operations and on appropriate measures to enhance efficiency and productivity at the plant level, that no universal tally system appears to be acceptable and that the appropriateness of any particular system depends on factors such as flexibility of production levels, plant design, manning levels and the extent of mechanical aids. We are also satisfied that there are alternative incentive payments schemes which do not have the historical limitations of the tally systems and that consideration of them should be encouraged.

In any new scheme care will need to be taken to ensure that unjust or unreasonable demands are not made on employees.

_______________________________________________________________________________

(10)"Pursing Best Practice", Report of the Australian Meat Industry Tripartite Overseas Mission, November 1990, p.15

INQUIRY INTO THE MEAT INDUSTRY 9

Although we are not prepared to have an award prescription requiring the introduction of an incentive payments scheme, we have concluded that the minimum rates award for the processing sector should contain a provision under which it is clear that an employer, the employees and their union may agree on the introduction of an incentive payments scheme based on productivity performance. That provision should also provide a minimum level of earnings to be expected under that incentive payments scheme. Finally, the provision should ensure that if the productivity performance set by the scheme is not met the worker or workers involved are entitled to the minimum rates of pay prescribed by the award.

Details of such incentive pay schemes are appropriately covered by enterprise agreements. These details would include provisions in relation to incentive payments for follow-on labour and penalty payments which received a great deal of attention in these proceedings.

In discussions leading up to enterprise agreements which include an incentive payments scheme, consideration should be given, where relevant, to the continuation of individual penalties for gender and weight of the animals, the conditions applying and their method of expression which should include questions such as whether they should be expressed as money amounts or recognised as part of the normal incidence of employment and contained in the appropriate wage rate.

Fluctuations in production requirements are a significant feature of the industry and daily hire, use of accumulated rostered days off, guaranteed

minimum payments with intermittent and seasonal allowances have been used to cater for those fluctuations. The Report of the Australian Meat Industry Tripartite Overseas Mission recognised the need to provide "stable employment to workers"(11) and "some capacity to accommodate seasonal operations where they exist"(12). The mission report also recommended that as a part of enterprise bargaining there should be "specific provision for permanent employment"(13).

Some companies already maintain constant levels of production and employment but a fundamental change to either permanent or weekly employment does not appear to be practical in some regions given seasonal and climatic conditions and the fluctuation in the availability of stock.

Nevertheless, employees in the meat industry should be given the same degree of security and associated benefits as employees in almost every other industry covered by awards of the Commission. Weekly employment on a permanent basis should be encouraged. In principle, and where practicable, employers should be able to engage employees on weekly hire, with casual or part-time employees providing the necessary flexibility to meet fluctuations in demand in the processing sector.

The terms of the minimum rates awards should allow as much flexibility as possible. In particular, maximum flexibility in working hours should be provided to allow for the better use of capital investment.

We also consider that there should be no artificial restrictions on production. Employees should be required, by award, to process such number of stock as an employer shall reasonably require and employees should be required to work reasonable overtime.

_______________________________________________________________________________

10 INQUIRY INTO THE MEAT INDUSTRY

We emphasise that the proposed minimum rates awards are minima only and they should contain provisions in relation to ordinary hours of work, annual leave, public holidays, termination, change and redundancy, occupational superannuation and settlement of disputes clauses. These awards should be as simply constructed as possible.

All parties and interveners are of the opinion that enterprise agreements should be the vehicle for the discussion of productivity and efficiency issues.

In this respect many issues, mainly the subject of existing overaward arrangements, were referred to during the proceedings. However, we would emphasise that the existing National Wage Case principles in relation to enterprise bargaining do allow for consideration of matters of both award and over-award nature and that the widest possible agenda is envisaged. We see no reason for adopting a different approach in this industry.

It should be clear that we see enterprise bargaining agreements as available for improvements at the enterprise level, in efficiency and productivity, and also for expressing details of any incentive payments scheme the parties may adopt.

The employers claim that existing seniority provisions are inconsistent with the adoption of a new classification structure based on skill and

responsibility, militate against the acquisition of wider skills and impede job flexibility and mobility. The union claims the seniority system which applies throughout the processing sector should be retained. Clearly seniority is relevant to a number of issues including those referred to by the employers and is also relevant to priority of engagement and termination of employment.

We believe that primarily the appropriateness of existing seniority provisions is a matter for discussion at the enterprise level and should be examined by the parties to enterprise negotiations.

Considerable discussion took place about the level of industrial disputation which was generally acknowledged as being too high. However it should be said current circumstances in relation to the level of work stoppages are vastly different to those which existed at the time the inquiry was

established. Work stoppages have been reduced substantially.

We consider that this factor, plus the fact that consultative procedures have already been established at some enterprises, supports our view that we should encourage the development of consultative procedures designed to alleviate the problems identified by both parties and to improve efficiency and productivity. The procedures we have attempted to set in train should provide the parties with the opportunity to improve relationships both at an organisational and an enterprise level.

Particular reference was also made to the inclusion in awards and/or agreements of settlement of disputes clauses. We believe that both minimum rates awards and enterprise agreements should contain settlements of disputes

clauses. We do not believe that the clause suggested by MATFA is appropriate for minimum rates awards of general coverage. A simplified clause needs to be

INQUIRY INTO THE MEAT INDUSTRY 11

inserted in the minimum rates awards. This should not prevent the settlement of disputes clauses in enterprise agreements being tailored to meet the circumstances in each case.

We have already commented on the need to change by way of negotiation and

Pursuant to the implementation of the April 1991 National Wage Case decision as part of the Commission's endeavours to ensure that the processes for the conduct of enterprise bargaining were properly established enterprises were required "to establish a consultative mechanism and procedures appropriate to their size, structure and needs for consultation and negotiation on matters affecting their efficiency and productivity"(14).

In addition the Act encourages the inclusion of appropriate settlement of disputes clauses in awards and for the Commission to play a conciliation role in relation to particular disputes. We recommend that the parties have regard to these factors when considering ways and means of settling industrial disputes. Negotiation and consultation should be an important part of any disputes settlement procedure. We emphasise that, in our view, a number of

the disputes in the industry could have been resolved without industrial action if proper processes were in place and utilised.

Section 133 of the Act provides for an industry-wide consultative council. We suggest that such a council be established. As well as matters relating to award matters such a council could be a forum for discussion of issues relevant to industrial relations and other issues pertinent to the well being of the industry generally. In this respect we consider that all restrictions on the efficient operation of the system and all matters which go to improved productivity should be discussed.

We would foresee such a council dealing with the widest possible range of issues of an industrial nature. For instance, we believe there should be properly designed and accredited skills training processes including appropriate new apprenticeship schemes and traineeships. Primarily this is an issue for the parties, Governments and educational institutions but there is no reason why this should not be discussed by an industry-wide consultative council established pursuant to section 133 of the act.

Other issues which seem appropriate for discussion by such a council include:

Any other relevant matters should also be the subject of discussion. We also suggest that, if substantial improvement is to occur in the conduct of industrial relations and the parties are to continue with award coverage in the federal jurisdiction, the existing structures of the relevant registered

organisations should be examined. _______________________________________________________________________________

12 INQUIRY INTO THE MEAT INDUSTRY

We also commend the moves to establish consultative committees by the Government because, in our view, if there is to be progress on many of the issues raised before us (which were not of an industrial relations character) action will be required by governments and/or bodies other than industrial relations tribunals.

The decisions we have made are consistent with the objectives of both parties, that is to say the creation of certain minimum rates awards with appropriate provision for the negotiation of enterprise agreements covering particular enterprises. It is to be observed that many awards in the industry provide award coverage for employees of individual companies and that this is the result predominantly of individual negotiations which occurred several years ago and of some more recent arbitrated decisions by the Commission.

The purpose of the alterations to be made, as explained earlier in more detail, is to provide a realistic opportunity for the parties to bring about a new situation in their industrial relationship which will encourage improved efficiency, leading to higher productivity, and the creation of a proper career path for employees resulting in higher paid and more rewarding jobs.

In order to ensure that the result of these changes is fair, just and

reasonable, it will be necessary for the parties to confer and, if possible, reach an agreement in respect of proper transitional arrangements. Where agreement cannot be reached the Commission is prepared to intervene to ensure that the intention of this decision is not misapplied and the opportunity to achieve reform is not lost.

In order to allow proper consultation to take place between the parties the minimum rates awards arising from these proceedings should operate from 1 January 1993.

The Commission will be available to conciliate or arbitrate on all issues between the parties either in the minimum rates awards or the enterprise level agreements provided any arbitration shall be in accordance with the procedures and processes of the National Wage Case principles.

We have decided there should be three minimum rates awards covering the retail, smallgoods and processing sectors respectively.

Allied with those three awards we contemplate individual employers

entering into enterprise agreements pursuant to section 115 of the Act and the October 1991 National Wage Case decision.

Proper career structures and rates of pay consistent with the various National Wage Case decisions should be included in each of the minimum rates awards.

The awards should be based on time work and each classification level should contain a description of the level of skills required and should recognise that an employee is required to carry out such work as the employer may reasonably require.

INQUIRY INTO THE MEAT INDUSTRY 13

In principle, sufficient flexibility should be allowed in awards of the Commission to allow enterprises to determine their working arrangements.

The minimum rates award for the processing sector should contain a provision under which it is clear that an employer and his employees and their union may agree on the introduction of an incentive payments scheme based on productivity performance. That provision should also provide a minimum level of earnings under that incentive payments scheme. Finally, the provision should ensure that if the productivity performance set by the scheme is not met the worker or workers involved are entitled to the minimum rates of pay prescribed by the award.

Details of such incentive pay schemes are appropriately covered by enterprise agreements.

Weekly employment on a permanent basis should be encouraged. In principle, and where practicable, employers should be able to engage employees

on weekly hire, with casual or part-time employees providing the necessary flexibility to meet fluctuations in demand in the processing sector.

The minimum rates awards should contain provisions in relation to ordinary hours of work, annual leave, public holidays, termination, change and redundancy, occupational superannuation and, subject to maintaining these basic standards, should be as flexible as possible. The awards should also contain settlement of disputes clauses.

Negotiation and consultation should be an important part of any disputes settlement procedure. An industry-wide consultative council should be established.

The minimum rates awards arising from these proceedings should operate from 1 January 1993. Such a timetable should allow the parties sufficient time to negotiate both the content of the minimum rates awards and the necessary enterprise level agreements and any appropriate transitional arrangements.

The Commission will be available to conciliate or arbitrate on all issues

between the parties either in the minimum rates awards or the enterprise level agreements provided that any arbitration shall be in accordance with the procedures and processes of the National Wage Case principles.

D. Bleby, Q.C., with G. Muecke of counsel, J. Markham and J. Salter for the Meat and Allied Trades Federation of Australia, Associated Meat Processors Pty Limited, Castricum Brothers Pty Limited, R.J. Gilbertson Pty Limited, Gilbertsons Group Services Pty Limited, Glebe Farm Pty Limited, Meat Exports (Sydney) Pty Limited, Medley Park Pty Limited, Noble Einsiedel Pty Limited, G. and K. O'Connor Pty Limited, Sale Meat Export Pty Limited, Webb Meat Exports (Australia) Pty Limited, Victorian Export Meatworks Industrial Council,

Associated Meat Processors Pty Limited and Thomas Borthwick and Sons (Pacific) Pty Limited.

14 INQUIRY INTO THE MEAT INDUSTRY

S. Rothman of counsel with L. Day for The Australasian Meat Industry Employees Union and J. Doran of the Australian Council of Trade Unions (intervening).

J. Dawson with M.J. Fisher for the National Farmers' Federation, Victorian Farmers Federation Industrial Association, NSW Farmers' (Industrial) Association, The United Graziers Association of Queensland (Union of Employers), the TFGA Industrial Association, Western Australian Farmers Federation Industrial Association and The Pastoralists' and Graziers' Association of Western Australia (Incorporated) (intervening).

N.A. Swails and P. Clarke for the Minister of State for Industrial Relations (intervening).

INQUIRY INTO THE MEAT INDUSTRY 15

Industrial Relations Act 1988

(C Nos 04639 of 1986, 22952 of 1988, 26868, 27091 and 36469 of 1989, 20288, 20680, 20681 and 20683 of 1990)

COMMISSIONER HARRISON SYDNEY, 12 SEPTEMBER 1991

16 INQUIRY INTO THE MEAT INDUSTRY

INQUIRY INTO THE MEAT INDUSTRY
17

Chapter
Page

Introduction 18

1 Nature of awards
24

2 Award structures 28

3 Contract of employment 37

4 Incentive schemes
43

5 Penalty payments 62

6
Enterprise agreements 65

7 Seniority
77

8 Additional payments 79

9 Absenteeism and turnover 82

10 Industrial disruption
85

11 Occupational health and safety 98

12 Training
102

13 Other issues raised by principal parties 109

Appendix 1 New Zealand inspections 113

Appendix 2 Summary of Tripartite Mission Report 114

List of Exhibits
118

Appearances, dates and places of hearing 119 and inspections

18 INQUIRY INTO THE MEAT INDUSTRY

On 7 March 1990 the President issued a decision under Section 107 of the Act constituting a Full Bench to hear and determine matters in C Nos. 4639 of 1986, 22952 of 1988 and 26868 of 1989. Those matters had been the subject of proceedings before Deputy President Riordan.

The decision of the President followed an application by the Australian Council of Trade Unions (ACTU) for reference of those matters to a Full Bench on the basis that issues raised within them had important implications for the future of wage fixation in the meat industry.

In his decision the President indicated that he would consider whether other applications then before the Commission should also be dealt with pursuant to s.108 of the Act and be referred to the same Full Bench for determination.

Subsequently the following matters were also referred:

C No. 27091 of 1989 C No. 36469 of 1989 C No. 20288 of 1990

C No. 20680 of 1990 C No. 20681 of 1990 and C No. 20683 of 1990

Initial proceedings before the Full Bench were conducted on 23 March 1990, when all matters were referred to me for investigation and report pursuant to s.107(10) of the Act.

On 9 April 1990, following conference proceedings where the Meat and Allied Trades Federation (MATFA) and the Australasian Meat Industry Employees Union (AMIEU) submitted proposals concerning the scope of issues appropriate

for consideration the terms of reference for the inquiry were published as follows:

The Australian Industrial Relations Commission will forthwith:

Inquire into and report upon all aspects of the meat industry, the subject of Federal Award Regulation, with a view to improving industrial relations, efficiency and productivity in the industry consistent with the National Wage Case decision of August 1989.

Consider the rationalisation of the number of Federal awards in the meat industry.

Examine the variations in standards of rates and conditions - both award and overaward.

Examine all sectors of the meat industry as follows:

(b) Domestic meat processing and wholesale operations; (c) Smallgoods; (d) Retailing, including supermarkets.

INQUIRY INTO THE MEAT INDUSTRY 19

Undertake a comprehensive programme of inspections as required (the parties are to consult on a program).

Ensure, under the auspices of the Commission, that the parties develop a simplified classification structure, incorporating the principles of broadbanding, development of skill-related career paths and training and the removal of job demarcation barriers consistent with the principles,

Examine wages and conditions of employment across the various sectors of the Federal Meat Awards, including appropriate relativities for classifications and the nature and extent of overaward payments, and to make appropriate recommendations having regard to the wage fixation principles.

Examine systems of work including tallies and alternatives to current arrangements, including the efficiency of such systems, having regard to the current and future impact of technological change, and manning levels.

Examine the basis of engagement and employment within each sector of the industry and any appropriate alternatives.

Examine any special needs in relation to systems of work for domestic operations on head tally, timework operations or other arrangements.

In undertaking this investigation, the parties will endeavour to finalise submissions and inspections by 1 October 1990.

No part of this inquiry should preclude continued efforts to address restructuring within the industry including matters already subject of dispute before the Commission and on which the Commission is available to assist the parties.

The purpose of an inquiry under s.107 (10) of the Act is to investigate and report back to a Full Bench, therefore contrary to the wishes of some parties, it would not be proper for me as a single member of the Bench to publish recommendations or findings in this report. The report is structured to summarise the major issues raised by the parties in the course of the inspections and submissions.

The inquiry was undertaken concurrent with my assigned panel duties and undertook a comprehensive program of inspections of meat industry establishments throughout the States of Victoria, South Australia, New South

Wales and Queensland. Some 34 operations were visited to provide an understanding and overview of the industry in all its facets. The program comprised:

17 abattoirs and processing works servicing the export market; 7 operations servicing domestic markets; 3 smallgoods manufacturing operations; 6 retail butcher shops; and 1 experimental technology plant.

20 INQUIRY INTO THE MEAT INDUSTRY

The majority of operations visited were respondent to awards of this Commission. Awards of the respective State industrial jurisdictions applied to some establishments in South Australia, New South Wales and Queensland. The incidence of private agreements overlaying award provisions in all jurisdictions and across all industry sectors was high. A multiplicity of overaward arrangements was a feature of slaughtering and processing establishments in particular.

The inquiry utilised the services of the Commonwealth Reporting Service throughout the inspection program, and with evidentiary proceedings and formal submissions by parties and interveners, some 58 days of transcript were recorded.

In addition to the inspection programme in the Eastern States of Australia, the inquiry also visited New Zealand. A further six slaughtering and processing establishments were inspected in that country and discussions held with representatives of management and union in each case concerning working arrangements and systems which apply to the New Zealand Industry. Visits were also made to the Meat Industry Research Institute in Hamilton (MIRINZ) where research and development activities in all aspects of meat processing are carried out aimed principally at improving meat plant operations and product quality, and the Massey University in Palmerston North, which conducts Diploma courses in various aspects of the meat industry and offers consultancy services, research facilities and off-campus training programs for industry participants.

MATFA and AMIEU, the principal parties to the inquiry, participated with the Commonwealth Government in a tripartite mission overseas during the inquiry's course. The mission visited Denmark, Germany and the United States to inspect industrial relations systems and production processes within the meat industry in those countries and to have discussion with industry representatives. The conduct of this inquiry was one factor which provided impetus for the mission, and a report of the mission findings and recommendations has been supplied to the inquiry. Both MATFA and AMIEU have also put submissions to the inquiry on particular aspects of the industry observed by the mission. The report is a useful guide to the issues upon which the parties agree and a summary is attached at appendix 2.

Written submissions to the inquiry were provided by the National Farmers Federation (NFF), the Commonwealth Government and the Victorian Government. Both the NFF and the Commonwealth Government appeared before the inquiry to make verbal submissions in support of, and expanding upon the written material.

The AMIEU and MATFA made detailed and comprehensive submissions to the inquiry. A substantial amount of material was also tendered as exhibits - some 191 in all - and adduced by examination of 22 witnesses.

A list of exhibits tendered is attached. Summaries of evidence and submissions of MATFA and AMIEU are contained in the report.

On 7 May 1991 the ACTU and the AMIEU withdrew from the inquiry following a request for a four week adjournment which I rejected. The inquiry continued without union participation for a further five sitting days when the Commonwealth requested and was granted an adjournment to enable the Minister for Industrial Relations time to encourage the union to resume its place before the inquiry. The Minister's efforts were to no avail and at the conclusion of MATFA's final submissions, the inquiry adjourned on 26 June 1991.

INQUIRY INTO THE MEAT INDUSTRY 21

The importance of the meat processing industry to the Australian economy was emphasised by the parties and interveners. The industry is a $3 billion per annum export earner (excluding by-products) and ranks fifth only behind coal, aluminium, wool and gold.

AUSTRALIAN EXPORT EARNINGS BY INDUSTRY CLASS (1989/90)

The meat industry plays a significant role in the Australian economy and is the single largest sector in the food processing industry.

Estimates of the industry labour force produced by the Australian Bureau of Statistics indicate employment of more than 51,000 in 1989 (this figure however includes poultry as part of the industry under Australian Standard Industry Classification 211).

In the same year the Australian Meat and Livestock Industry Policy Council reported that the processing component of the industry included 564 meatworks, of which 86 held export licences. Many of these operations are located in rural areas and provide important employment opportunities and revenue contribution for local economies.

As an export revenue earner, in the financial year ended June 1990, the value of Australian meat exports was in excess of $2.8 billion (Australian Meat and Livestock Corporation statistical review, June 1990). Of that total, Beef and Veal exports accounted for $2.3 billion. The United States was our largest customer ($1.04 billion) followed by Japan ($0.9 billion).

At the time of this report's preparation future levels of Australian exports to the US were uncertain following reports that the US Department of Agriculture was considering imposing import quotas for the remainder of 1991.

22 INQUIRY INTO THE MEAT INDUSTRY

Both MATFA and The National Farmers Federation's long term view of the future was generally optimistic:

"National Farmers Federation (NFF) expects the increase in demand for food will be accompanied by declining growth in agricultural production in the Western Pacific region. This is the first time in history that the growth centre of the world economy is placed squarely in an area that is poorly suited to producing agricultural products.

Australia's future lies in feeding the people of the Western

Pacific region. The region now accounts for approximately 45 percent of Australia's exports compared with around 10 percent in the early 1950's and this is expected to rise to an estimated 55 to 60 percent by the year

NFF also expects a long term international decline in government support for inefficient agricultural enterprises in developed countries.

This will hasten export potential for Australia. The Australian meat production industry, in toto, is arguably the most efficient in the world. However the processing sector particularly in export works is constraining international export competitiveness. If the Australian red meat industry can improve overall efficiency it will then have the ability to compete on an equal footing, replacing many existing sources of supply to those countries in the Western Pacific Region.

These conclusions by the National Farmers Federation support the conclusions of the Australian Manufacturing Council in their report, "The Global Challenge - Australian manufacturing in the 1990's".

'The resource-based industries will remain the back-bone of the industrial economy and be more significant than they are today.

There will be two dimensions to their expansion: processing of a higher proportion of the raw materials we produce to make higher value commodities, and growth of differentiated resource-based products.'"(15)

"The Australian beef industry is heavily dependent upon the domestic market and export markets in the United States, Japan, Korea and Taiwan. Most expectations are for continued firm demand but without dramatic lifts in either volumes or prices. The proportion of exports going to the North Asian markets of Japan and Korea is likely to rise."(16)

The National Farmers Federation (NFF) submitted to the Inquiry that Australia currently enjoys a favoured position as a meat exporter due to its freedom from Foot and Mouth Disease however, control and eradication programmes in Europe and South America could mean that within the next five to ten years significant areas will be declared disease free. The NFF concludes that " . . . the beef industry must prepare now for an increasingly competitive marketing environment in which processing costs and quality considerations will

All parties and interveners acknowledged the poor industrial relations which exist in the industry. The ACTU said, when reviewing the inspection process, at pages 634 and 635 of transcript, " . . . we've seen, with one or _______________________________________________________________________________

(15)Exhibit MATFA 24, p.7 (16)Synapse Consulting (Aust) Pty Ltd, July 1991

INQUIRY INTO THE MEAT INDUSTRY 23

two notable exceptions, generally, a poor industrial relations environment on the plants, both in terms of employer/union relations and employer/employee relations".

In reviewing the industry inspection programme the Council added " . . . the working environments seen in the course of the inspections were generally very poor, with workers required to perform their work in cramped, noisy and slippery conditions and being subjected to extremes of temperature and being required to work at a constant speed . . . " and " . . . the work was of a heavy, physical and often hazardous nature".

" . . . There had not been a high degree of new technology introduced into meatworks in this country . . . it was clearly the view of workers in the plants that the technology that had been introduced had not resulted in any easier performance of their work. Rather, it had largely resulted in the loss of jobs and increased production on the plants".

MATFA expressed the view at page 1199 of transcript that the industry was in crisis generally:

"There is deepening crisis of falling international productivity with no present incentives to improve productivity levels; a crisis of declining profitability as measured against a number of recognised objective standards; and an abysmal record of industrial disputation, distrust and open hostility; a crisis involving attitudes and the culture of participants within the industry - a culture conceived in history, born

out of mutual oppression, nurtured by self-interest, and without reform, about to strangle the very industry which it gave life to."(17)

_______________________________________________________________________________

24 INQUIRY INTO THE MEAT INDUSTRY

(1) NATURE OF AWARDS : MINIMUM RATES OR PAID RATES

The ACTU submitted that an important threshold issue for the inquiry was to determine whether federal meat industry awards were minimum rate or paid rate by nature.

The Council asserted that workers within the industry do not have access to overaward payments or to incremental advancement/experience payments; nor had supplementary payments been inserted into industry awards.

The ACTU submitted that the awards currently applying in the meat industry are by nature minimum-rate, with the application of the tally system mechanism determining actual rates and thereby converting minimum rates to paid rates:

"Well, we think there's been some confusion about their proper - which reflects, I suppose, the confusion that's existed generally about the nature of paid rate rates awards and their interrelationship with minimum rates awards. We think they - we submit they are minimum rates awards; that because of the operation of the tally system they are minimum rates awards with special characteristics.

We say they are minimum rates awards; they should be subject to having the minimum rates adjustment applied to them, and that we say there should be no minimum rate - absorption of minimum rates adjustments

in terms of the tally system that operates. If they were paid rates awards, they would have been entitled to some larger wage increases. And I'll now go to a review of paid rates award histories that indicate this."(18)

In Exhibit D39 the ACTU tendered summaries of wage histories in the Oil, Waterfront, Aircraft, Vehicle and Rail Industries together with graphical

comparisons of increases to the FMIA Slaughterer's rate over the same period to illustrate this point. The exhibit also included excerpts from the Commonwealth Government response to questions of the 1991 National Wage Bench concerning the extent of Structural Efficiency Principle increases in paid rates awards. The ACTU concluded that:

"In terms of the meat industry, as I said, Commissioner, we believe that these are minimum rates awards. If other parties were indicating they should be considered as paid rates awards, then we would say they should be subject to the same criteria that have been set down for paid rates

awards and we would submit that that would result in higher wage increases than are being sought on the basis that they are minimum rate awards."(19)

The ACTU submitted that the tally system does not constitute an over-award payment system but rather applies overtime payments to work in excess of that which may be reasonably expected of a timeworker for a normal

day's work. Consequently industry awards should have minimum rates adjustments applied to them by way of supplementary payments without absorption of such adjustments with the application of the tally system. Minimum tally should comprise the minimum award rate with loadings above minimum tally continuing to apply as at present.

(18)ibid., p.988 (19)ibid., p.991

INQUIRY INTO THE MEAT INDUSTRY 25

MATFA contended that insofar as piecework was concerned, meat industry awards had historically been regarded as paid rate by nature:

"One of the matters does relate to the proper fixation of minimum rates awards and I think it is important that I do say this and I say it with

all due respect to my colleague, that so far as the piece-work provisions exist in the Meat Industry Award, they have historically been regarded by this Commission as paid rates, even though there may be other parts of the award, particularly in the case of say, the Federal Meat Industry Award where those parts would be seen as minimum rates, particularly

MATFA submitted that a single new meat industry award (excluding ACT and NT operations) should be established based on timework and prescribing minimum rates in accordance with the principles established by the National Wage Case decision of August 1989:

"The rates of pay should, consistent with the principles of the National Wage Case decision of August 1989 (Print H9100) contain classification rates and supplementary payments, phased in in accordance with that decision, in a manner that establishes proper minimum rates in accordance with the grid determined in that National Wage Case decision."(21)

Piecework payment systems should not be part of award prescription, but rather should be available to industry establishments through Appendices to the new award (containing tally prescriptions on both a unit and head basis) or by way of s.115 agreements. Tallies prescribed should reflect current maximum tally under the unit tally system.

The Angliss group made no submissions on the nature of award coverage of the industry as being either minimum rates or paid rates. The company did submit, however, that the current system of payment should be changed; that the tally system was no longer appropriate and had become a burden on the industry. The Company considered that a move to timework earnings would lead to improved productivity and efficiencies.

The NFF advocated one national award which would provide for a core of basic entitlements, including minimum rates of pay. Actual rates of pay and conditions should then be negotiated at an enterprise level according to the circumstances of individual plants:

"We say there should be one national award but it should be able to operate on the basis of providing a core of basic award entitlements which aren't argued: basic annual leave, basic hours, basic sick-leave, so on, and into which each enterprise can plug in the particular arrangements that best suit that enterprise and also minimum rates would be part of that national core."(22)

_______________________________________________________________________________

(20)ibid., p.72 (21)Exhibit MATFA 113, p.262 (22)transcript, p.800

26 INQUIRY INTO THE MEAT INDUSTRY

The Federation contended that the enterprise-level agreements to apply on top of the core award proposed should desirably be regulated by Common Law Contract which in its view would be "more enforceable" than awards made or

agreements certified by the Commission. Alternatively they may be processed under either s.112 or s.115 of the Act.

The NFF proposed that changes to the provisions of such awards and agreements should be available at any time provided that the changes made do not involve a prima facie loss to the employees involved of their "normal earnings". Such changes may for example be made with the introduction of new technology or machinery with the onus resting with the union to demonstrate loss to employees should the union disagree with the action proposed:

"Our position would be that if there is no loss of benefit to the Employee then there should be no ground to delay, defer or obstruct changes from being made.

Let me run through how we would see a new Award structure operate:

(i) In both the domestic and export processing, and if those

changes result in no loss of benefit to the Employee such changes could be made by management after consulting the Employees.

(ii) As changes in the Agreement become necessary, and if those

changes result in no loss of benefit to the Employee, such changes could be made by management after consulting the Employees. These changes would either be in a Common Law contract or registered with the IRC under s.112 or s.115 or both.

(iii) As changes in either the Agreement, or other working

arrangements become necessary, and if those changes resulted in no loss of benefit to the Employees, such changes could be made unilaterally in industrial terms, but after informing the Employees.

(iv) If the Employees felt that the change being made was reducing their benefits, and such a claim was contested by the Employer, then this Commission would become involved.

(v) The change would remain until the IRC determined the matter."(23)

The Commonwealth favoured the establishment of a minimum rates award providing for basic pay and conditions, with enterprise agreements overlaying such an award. It felt that such an arrangement would provide consistency and stability in basic pay and conditions whilst allowing flexibility for individual enterprises or groups of enterprises to negotiate local working patterns and arrangements to meet local conditions:

_______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 27

"We are of the view that there should be a single federal umbrella-type award for this industry. In line with recent developments in the wage-fixing system and the increased focus being placed on the development of working arrangements to suit enterprise specific conditions, the Commonwealth sees merit in the new award framework for the industry, allowing sufficient flexibility for enterprises to determine a number of working arrangements, including payment systems, ie piece rate, or time based, or a combination of the two.

The award framework would of course provide a safety net in terms of setting minimum award rates of pay, and would also have to include changes to hiring arrangements, establishment of new classification structures which facilitate multi-skilling and career paths, and the introduction of new and flexible working arrangements.

The current wage fixing principles already allow some scope for enhancing enterprise flexibility through the introduction of enterprise

flexibility clauses, or facilitative provisions into awards."(24)

The Commonwealth also addressed the situation of unregistered agreements currently applying in Victoria, proposing that such agreements should be tested within the Commission against the wage fixing principles:

"With regard to the situation with unregistered agreements in Victoria, the Commonwealth would argue that those agreements should be put before the AIRC and tested against existing wage fixing guidelines.

If the Commission finds they do not meet the criteria established under those guidelines, the parties involved should be given a reasonable period of time (say 2 years) to adjust those agreements so that they are in line with an agreed single federal award."(25)

_______________________________________________________________________________

(24)transcript, p.2029 (25)Commonwealth written submissions, p.14

28 INQUIRY INTO THE MEAT INDUSTRY

The ACTU did not press for a single award to replace the plethora of awards currently operating throughout the industry. The union focus was rather directed towards the achievement of consistent minimum rates and conditions across a national framework of federal award regulation:

"The Commissioner: Does that rationalisation lead to the position that the

NFF were suggesting of one national award, in your view?

Ms Doran: We don't know about the achievability of a single national

award. We think there should be a credible federal meat industry award in its present form and we also seek consistency and the union will be putting consistent proposals in terms of a classification structure and rates of pay in terms of both a federal Meat Industry Award and a Consolidated Queensland Meat Industry Award and also with respect to the

Ms Doran: Consistency, a reduced number of awards and consistency between those awards we think is an achievable objective in this inquiry.

The Commissioner: I guess I should have asked Mr Houlihan this question, but your views would be interesting in respect of do you see the

rationalisation of the awards as covering all aspects of the industry; from processing to small goods to retail?

Ms Doran: Yes, yes, Commissioner. It's been our position that the - and in terms of dealing with the Federal Meat Industry Award that is made clear in terms of Part I and Part III, Part I applying to your smaller abattoirs and your smallgoods sector and your retail sector and Part III applying to the processing sector."(26)

The ACTU did not include Victoria in the award coverage it proposed. Rather, the Council submitted that agreements reached with a number of employers in that State should be ratified by the Commission under s.115 of the Act. A copy of such an agreement was tendered as Exhibit D60. This issue is discussed later in this report under the heading "s.115 Agreements".

The ACTU submitted that it was not possible for "one big blueprint" to apply to the industry due to its disparity and the variables affecting different plants. It considered that the detailed application of any work system to apply at individual workplaces must be negotiated in an environment of mutual respect and trust at the workplace level if the work system were to be effective. It submitted further that the Commission would be placed in an impossible position were it asked to arbitrate on the detail of conditions appropriate to particular enterprises where such negotiations broke down.

_______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 29

The ACTU proposed a structure across the major existing federal awards involving the broadbanding of all current classifications into 7 new basic classification levels, with an additional two "mini" levels to accommodate driving functions and multiple skills in slaughtering and processing areas. In advocating this structure the Council relied upon the August 1989 NWC decision, and subsequent decisions of the Commission giving effect to the structural efficiency principle and providing minimum rates adjustments in the Metals, Building, Transport, Warehousing, Timber and Childcare industries, together with decisions of the Victorian Commission applying similar adjustments to the Victorian Commercial Clerks Award. Copies of those decisions were tendered to the inquiry as Exhibit D40.

The new seven level structure proposed by the ACTU is contained in Exhibit D42. Basic trades equivalent functions and classifications appear at the fourth level of the structure. Relativities of other levels and functions were submitted to have been formulated to be consistent with relativities of comparable classifications in the Metals, Building, Transport etc. industries referred to above. Functional definitions of each level together with documentation on the translation of existing classifications to the new structure, including broadbanding and phasing of minimum rates adjustments are included in the exhibit.

A very brief resume of the structure proposed by the ACTU in Exhibit D42, with examples of indicative tasks at each level, is as follows:

Grade 1 - $345.95 (85%) - "all others" classifications - first 12 months

Grade 2 - $366.30 (90%)

• "all others" classifications - 12 months experience

Grade A - $376.10 (92.5%) - driving classifications

Grade 3 - $390.72 (96%) - retail salesperson, smallgoods filler

machine operator, slaughterhouse and boning room labourer

Grade 4 - $407.00 (100%) - general butcher not serving (retail), silent cutter operator, boner (smallgoods), "B" slaughterer (one

Grade 5 - $427.00 (105%) - general butcher shopman (retail), smallgoods - (one person (smallgoods), "A" slaughterer (one task), boner (one cut), slicer (all cuts) (meatworks)

Grade A - $437.00 (107.4%) - "B" slaughterer (all tasks), boner (three cuts), slicers capable of

replacing boners (all meatworks classifications)

Grade 6 - $447.00 (109.8%) - Slaughterer (smallgoods and small abattoirs), "A" slaughterer (all tasks), boner (all cuts), slicer (more

30 INQUIRY INTO THE MEAT INDUSTRY

Grade 7 - $529.00 (130%) - general butcher in charge of shop (retail), "A" slaughterer (more than

one species), boner (more than one species) (meatworks)

In the context of this classification structure the ACTU proposed that all existing classifications in Division A of part I of the FMIA be deleted and replaced by classifications of Slaughterer's Assistant (Grade 3) and Slaughterer (Grade 5). It also sought that that Division's operation be restricted to small domestic or service kill operations employing not more than three slaughterers (including owner/proprietor/manager) " . . . to prevent disputes occurring about when Part I of the FMIA should apply and when not". The ACTU recognised that employees in such establishments were required to perform a much wider range of tasks and be skilled in a much wider range of functions than employees elsewhere in the industry.

The ACTU proposed that the existing Divisions C and I of Part I of the FMIA should be amalgamated as they both relate to Smallgoods and Ham and Bacon manufacture; a simplified definition of Division E (Domestic Meat Markets); and the restriction in operation of Division F (Boning/Pre-packing room operations) to situations where not more than three employees are employed. The latter restriction would give access to employees in Boning/Packing rooms of more than 3 employees to piecework rates:

"Essentially we are saying that persons employed in larger boning rooms should also - it's essentially an issue of who should be able to work to piece-work systems and who can be required to work to time work, and the same issue that arises in terms of abattoirs arises with respect to

boning rooms, with the union saying that larger boning rooms should not be required to work on a time work basis but should have the ability to work on piece-work systems."(27)

Existing interstate differentials are deleted from Part I of the FMIA under the ACTU's proposed broadbanded classification structure, and Part III of that Award is deleted to be replaced with relevant sections of the QMIA. Whilst this initial step achieves the consistency between Awards advocated by the Council, it was submitted also that the approach had been taken in the light of criticism in Commission decisions of the existing Part III:

" . . . there have been a number of decisions of the Commission that have said that Part III of the Federal Meat Industry Award is not a relevant - not an appropriate award of this Commission.

We are seeking to have the first step, the existing QMIA replace the Part III of the Federal Meat Industry Award and then we have proposed a broadbanding and new classification structure for the QMIA and we seek to have that dealt with in terms of Part III of the Federal Meat Industry Award."(28)

In proposing commonality of conditions between the FMIA and QMIA, the ACTU also advocates the application to Labourers under the FMIA of the 31-1/4% production loading which currently applies to Labourers 'tied' to piecework

teams under the QMIA where similar circumstances apply. This issue is addressed later in this report under the heading "Incentive payments to follow-on labour". _______________________________________________________________________________

(27)ibid., p.1018 (28)ibid., pp.997, 998

INQUIRY INTO THE MEAT INDUSTRY 31

MATFA submitted that there should be a single national award prescribing minimum rates of pay and employment conditions for the industry in areas presently regulated by the Commission other than the Northern Territory and the Australian Capital Territory:

"In part A.4 of this submission, we have already identified the confusing multiplicity of different awards and industrial agreements in operation in the industry. That is sufficient testimony in itself for the need for rationalisation. We submit that no reason has been advanced why award rates of pay and basic conditions of employment should not be uniform in

the industry or in the various sectors of it. We note that the Commonwealth submission of August 1990 (pp 12-14) advocates that there should be one award, providing a framework within which individual enterprises or groups of enterprises could negotiate their own local arrangements in appropriate matters. We also note that the suggestion of one award is endorsed by the NFF Industrial Submission. The New Zealand inspection notes indicate that that is the framework which also operates in that country in relation to minimum standards, with on-plant arrangements concerning wages, manning, production schemes etc. In our industrial setting, of course, the award should contain uniform minimum wages."(29)

The Federation did not seek to alter Federal Award regulation which presently applies in the Northern Territory and the Australian Capital

"We do not suggest that the award should apply in the Northern Territory. The nature of that award is described in the Commonwealth Government submission of August 1990, Appendix A, and already enshrines many of the principles being advocated in this submission. We should not seek to disturb a situation which, on the face of it, is working satisfactorily,

and which contains sufficient flexibility to accommodate desirable reforms in the industry.

Similarly, we do not seek to have Division III of the new award extended to the ACT, based on the information contained in the statement

of Bright (MATFA 44). It appears from this statement that the Melville Meat Award has maintained sufficient nexus over time with the Butchers Wholesale (Country) Award of the NSW Industrial Commission, and that the one plant bound by that award, by virtue of its geographical location, is more satisfactorily regulated by conditions based on the NSW award, given its proximity to other similar meatworks in NSW, and the fact that it is competing for stock with other employers bound by the NSW award."(30)

MATFA advocated that such a national award should be binding on itself, its members and all meat industry employers other than those currently bound by awards of State industrial jurisdictions. In this way it proposed that the award would effectively have common rule application. To enable such a situation it sought variation, pursuant to section 101 of the Act, of dispute findings in matters referred to the inquiry. This aspect of the Federation's submissions is detailed later in this report under the heading "Section 115 Agreements". _______________________________________________________________________________

(29)Exhibit MATFA 113, p.224 (30)ibid., pp.227, 228

32 INQUIRY INTO THE MEAT INDUSTRY

MATFA submitted that the structure of the proposed new award should reflect the present structure of the FMIA, with separate Divisions covering the retail, smallgoods and processing sectors of the industry. Such a structure would sensibly accommodate differences in classification structures, hours and other employment conditions across the three sectors.

The Federation proposed different classification structures for the processing sector on the one hand and the retail and smallgoods sectors on the other. Both structures comprise six levels, with the retail sector having an additional, higher classification for supervisory and management skills. In

each structure the Tradesman (Trades equivalent in the Processing sector) classification is at level 6. The remaining classifications have been set having regard to the percentage parameters contained in the August 1989 NWC.

In formulating the structures, MATFA indicated that regard was had for functions performed within each sector rather than classifications appearing in current awards. The structures proposed, with examples of indicative tasks, are as follows:

Grade 1 - $325.50 (80%) - Learner on probation

Grade 2 - $335.50 (82.5%) - Labourer - general labouring and

Grade 3 - $338.60 (83.2%) - Labourer - ordering, delivering (retail), packing room hand

Grade 4 - $368.20 (90%) - Semi-skilled employee - salesperson,

Grade 5 - $378.50 (93%) - Skilled employee - boner, silent

Grade 6 - $407.00 (100%) - Tradesman - general butcher,

Grade 7 - $415.00 (102%) - Tradesman with basic management or

supervisory responsibilities (retail only)

Grade 1 - $309.00 (76%) - Cleaner, yardhand

Grade 2 - $334.00 (82%) - Slaughterhouse, boning room labourer, forklift driver

Grade 3 - $358.00 (88%) - Fronting out, knocking (slaughter), boner, slicer (one cut)

Grade 4 - $374.00 (92%)

• Legging, sawing down (slaughter), boner (3 cuts), slicer

Grade 5 - $379.00 (93%) - Slaughterer, boner, slicer capable of all tasks on one species

INQUIRY INTO THE MEAT INDUSTRY 33

Grade 6 - $407.00 (100%) - Slaughterer, boner, slicer capable of all tasks on two species

The Angliss Group of Companies made no submissions on the need for rationalisation of federal award coverage in the industry.

The Group proposed a classification structure for the processing sector based on that applying in the Metal Trades Industry following the August 1989 National Wage Case. In doing so it took issue with ACTU submissions that classifications within the processing sector should attract Tradesmen (or higher) pay rates, and identified differences in the skills and responsibilities as between Boners and Retail Butchers:

"As far as this Company is concerned, a claim of this nature is upside down.

To start with, a person employed as a pieceworker boner in a meat processing plant has a number of skills.

1. Able to properly care for the tools of trade ie - a knife;

2. Know the cutting lines and some natural seams of a beef carcass and certain bone joints;

3. Able to remove meat cuts without damage, ie knife scores to other cuts, by following the prescribed cutting lines to produce the required product;

4. Able to work in a safe manner and not endanger other workers.

A Retail Butcher has to have the aforementioned skills plus be able to:

(a) make correct pickle mixtures; (b) pump silversides, briskets, legs; (c) make correct mixtures for sausages; (d) slice meat for tray displays;

(e) dress windows to attract sales; (f) be able to provide proper customer service; (g) use counter scales; (h) use band saw; (i) roll and tie roasts; (j) cost product prices through carcass yields; (k) manage stock rotation in cool room; (l) know health regulations."(31)

The Group submitted that the processing sector should comprise a five level classification structure with task allocation as follows:

"Grade 1 Employees presently classified as 'all other employees' in (76%) each Division. _______________________________________________________________________________

34 INQUIRY INTO THE MEAT INDUSTRY

(82%) Fork Lift Driver (in open spaces) Boning Room Labourer (as presently defined)

Testing, selecting, calibrating casings Employee drying blood

(85%) Fork Lift Drivers (in confined spaces) Opening paunches Cleaning and washing tripes by hand Hide fleshing machine operator Running off beef casings by hand

Grade 4 Hanging Wagon Driver (88%) 'B' Class Slaughterers

Slicer Operator of automatic dry-rendering plant Bench-power saw operator

Blending and deodorising oils Neutralising, bleaching and filtering oils

Grade 5 'A' Class Slaughterer (93%) Boner Grader General Slaughterer."(32)

The NFF submitted that the meat industry was over-regulated in present circumstances with the plethora of federal and State awards and registered and unregistered agreements which apply nationally. In its written submission it advocated a dramatic rationalisation of those awards and agreements and proposed that a single minimum rates award be established for industrial regulation of the processing sector of the industry. It proposed that enterprise agreements should overlay the national award, providing negotiated terms and conditions appropriate to individual plants, regulated by way of common law contract or the mechanisms available under s.112 or s.115 of the Act.

In both its written submission and in formal appearances before the inquiry the NFF referred to the Borthwicks Portland new award application as a demonstration of difficulties and problems which may occur with the multiplicity of award coverage of the industry inasmuch as part of the conflict between the parties in that case went to which award then existing the company was respondent to.

The NFF submission focused upon the abattoir/processing sector rather than retail and smallgoods areas. The Federation proposed a three-level classification structure for that sector:

Learner Meatworker - $345.95 (85%) - Beginner without experience in the industry, developing skills _______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 35

Specific Meatworker - $366.30 (90%) - Slaughterman, Boner or Slicer who can perform some, but not all, tasks within

General Meatworker - $407-00 (100%) - Slaughterman, Boner or Slicer who can

The Federation proposed these classifications and pay rates having regard to the August 1989 NWC decision and the application of the structural efficiency principle across other industries. It also noted that the disparity between pay rates at the three levels would provide incentive for as many employees as possible to progress through to General meatworker, with consequential achievement of greater efficiency and productivity for the industry.

The Commonwealth submission was directed principally to the abattoir/processing sector of the industry. It submitted that a single federal "umbrella type" award should replace federal awards currently regulating the industry. Such an award should provide minimum pay and conditions prescriptions

• a "safety net framework" - with individual enterprises negotiating specific work systems and conditions appropriate for the circumstances of individual plants. This approach would enable a consistency in pay rates, classification structures and basic conditions which does not occur with the current multiplicity of federal awards.

The Commonwealth also suggested that the scope of such an award may be broadened to encompass all employees in processing plants:

"The Inquiry might also consider a single federal award covering all workers in meat processing plants. While the industry appears to have a good history in terms of demarcation disputes, bringing all workers in

plants (ie process, maintenance and clerical) under a single award presents opportunities for improving working arrangements.

The effect of this would be to allow for more flexible career paths, improved utilisation of physical and human resources and remove inconsistencies in pay rates."(33)

Alternatively separate federal awards may apply on a State basis, market (domestic or export) basis or geographical (seasonal) basis. Whilst this approach would recognise variations in factors applying throughout the industry, the Commonwealth favoured the single award option on the basis that it provided the greatest flexibility within a consistent "umbrella" framework.

The Commonwealth did not specify a preference for a particular classification structure in the industry. In its written submissions it noted that in the development of such a structure the parties should have regard to NWC principles and should:

• ensure clarity of classification definition, indicative functions
  

_______________________________________________________________________________

36 INQUIRY INTO THE MEAT INDUSTRY

• identify training requirements
  

and formulate training principles and guidelines for the structure;

• commit themselves to the translation
  

to the new classifications; and

• be able to demonstrate the integrity of the new classifications and 
        associated rates of pay.
  

The Commonwealth also made the following submission in formal appearance before the inquiry:

"With respect to elements of award restructuring and the classification structure, in particular, a new award must contain a classification structure in our view that is skill-based and provides career paths and opportunities for multi-skilling for all workers. A skills register has been undertaken by consultants, McMahon and Associates.

This document was provided to you in our written submission. In our view, it is necessary now to build on that exercise and analyse the skills used in the industry and on the basis of that skills analysis, establish a new classification structure. This exercise must be bipartite and the Commonwealth has the resources and experience to assist the parties to undertake it, if they wish.

We are concerned that the broadbanding of existing classifications and wage levels is not appropriate, as it has the potential to build in existing inefficiencies. When the new structure is developed, the parties should negotiate wages and conditions to apply.

This in turn will require a comprehensive assessment of the work value of all classifications in the industry, in order to determine appropriate rates of pay in relation to the industry's own classifications, and in relation to classifications in other trades and occupations.

The Commonwealth can assist the parties by providing advice on the process and outcomes in other industries, who have undergone similar exercises. We recognise that this exercise cannot and should not be academically pure. There are industrial realities that must be taken into account. Nevertheless, it is our view that unless this basic skills analysis is done, it will be very difficult to establish a classification structure which is efficient, and provides appropriate rewards to workers on the basis of the skills they use."(34)

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INQUIRY INTO THE MEAT INDUSTRY 37

The ACTU submitted that the unavailability of regular work in the meat

industry was an issue of fundamental concern to employees. Seasonal and market factors in particular led to production interruptions involving the forced stand-down of employees, termination of employment or use of accrued rostered days off to cover fluctuations in production levels and periodic plant closures:

"As I said, the industry - inspections have shown that the industry

continues to be a seasonal one. On all of the plants inspected, apart from Dubbo and Corowa, production levels varied at different times. These fluctuations in production requirements were seen to be caused by, firstly, a lack of supply associated with seasonal factors such as calving, the culling of the mutton flock, and lambing - in terms of lambs.

Secondly, climatic conditions that in particular affect the northern Queensland works, but which have affected a number of the works that we have seen in the course of our inspections across a number of States, including New South Wales and South Australia. Thirdly, on farm production variations which were described at Blayney, in the course of

Secondly, fluctuations in production requirements are related to contract requirements, and these were referred to in the course of the Castricums Inspection, the Beef City inspection, and also the MRA Brisbane abattoir works. With respect to the latter, this was clearly affected by its nature as a service works, and it experienced quite remarkable fluctuations in employment levels on a daily basis.

Thirdly - the third factor influencing fluctuations in production requirements are issues such as the flock reduction scheme, which has

clearly had a major impact in South Australia, price fluctuations in terms of both livestock and end products, which was also referred to at Blayney. In some instances the variations were in respect to particular days of the week, and these could be dealt with through the effective utilisation of rostered days off, and that was the case at Herds which is, of course, a domestic works.

Even more seasonal variations could be and were being dealt with through the use of accumulated rostered days off, and that was seen at Borthwicks, in Portland, and also at Wodonga. Others were dealt with by reducing the number of chains working, for example, Gilbertsons and Blayney, or with respect to team sizes, which also occurred on a majority of works. They were also dealt with by the working of minimum tally, and this was raised as an issue on a number of works, especially in terms of the working of minimum tally for very long periods of time at Inverell

The ACTU submitted that the absence of employment continuity and security had led to the following employee reactions:

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38 INQUIRY INTO THE MEAT INDUSTRY

• attention to size of teams (which
  

affect wages and employment levels);

• restrictions on overtime, particularly to ensure that overtime on
  

one day is not followed by stand-downs the next day;

• endeavours to ensure that maximum tally is worked
  

to ensure reasonable and consistent wages;

• a strong emphasis on the seniority system; and
  

• the desirability of training in processing more than one species to enable transfer between species with market fluctuations.

The ACTU summarised this issue in the following way:

"These factors can be summarised as showing a continuing tension between employers wishing to produce at the highest possible level when supply and contract requirements converge and workers who are seeking to maximise the amount of regular employment at reasonable wage levels available to them in the industry. The seasonal nature of the industry also impacts on the high levels of turnover in the industry. For example, as described by the union delegate at South Burnett.

We've also seen the existence of daily hire allowances, guaranteed minimum payment provisions and intermittency and seasonal allowances that apply in the industry and these represent the unions responses over time to dealing with the seasonal nature of the industry and a recognition in

terms of this Commission to the nature of the industry in this regard."(36)

MATFA submitted that there was no justification for the retention of daily hire provisions in Federal meat industry awards. It proposed that any new

award provide for weekly hire only, asserting that the current conditions provide most of the benefits of weekly hire to employees already:

"He is entitled to payment for award holidays, sick leave, annual leave and long service leave, and receives the benefit of the standard Termination, Change and Redundancy provisions (see decision of Riordan DP and appeal decision, MATFA 81, pp.14-33).

Employees employed under the Thomas Borthwick and Sons (Queensland) Award and in Victoria are also entitled to an intermittency allowance (see MATFA 22B, pp.36-38), which has the effect of guaranteeing all

workers certain additional payments on retrenchment.

Employees employed under the Thomas Borthwick and Sons (Queensland)

Award, the Angliss Group Award and in Victoria are guaranteed minimum payments of at least four days per week (see MATFA 22B, pp.43-45).

A number of awards also make provision for a seasonal allowance applicable to regular daily employees, payable when an employee is terminated as a result of seasonal retrenchment (see MATFA 22B pp.51-53). _______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 39

Where accident pay provisions apply (MATFA 22B, pp.159-169), they apply equally to daily hired employees.

It can therefore be seen that whilst daily hired employees receive an extra 10% loading on weekly rates of pay, they have most of the

security of weekly hired employees, and in many cases receive additional benefits which can only be regarded as double counting."(37)

MATFA contended that the concept of daily hire bred negative attitudes in both employers and employees, encouraged the notion of labour as a dispensable commodity, failed to attract responsible labour and facilitated the "early finish" mentality. It was an employment condition which was restricted to the federally regulated area of the industry:

"Federal awards in the meat industry are the only awards to contain daily hire provisions. Weekly hire is the standard method of engagement under

NSW's awards (MATFA 22A, p.41), which cover about 4,000 employees (Sullivan, transcript p.1478). It is also the method of engagement under the one South Australian meat industry award, the Abattoirs Conciliation Committee Award (SA) (MATFA 81, p.10), and is the standard under the Meat Industry (State) Award (WA) (MATFA 81, p.11). Weekly hire is recognised

in the FMIA (Part I), but only as an incident of time work, not piece work (Part III)."(38)

The Federation noted that whilst weekly hire could not guarantee employment for a full 52 weeks per year, it would provide for meatworkers the same degree of security and employment benefits which apply across industry generally.

MATFA submitted that whilst seasonal influences had not disappeared from the industry, such fluctuations had substantially decreased. Whilst they may continue to influence the amount of activity at processing plants throughout the year, the necessity for plant closures for a period of weeks or months due to stock unavailability was now an infrequent occurrence. This submission was supported by the evidence of a number of witnesses and by information obtained during the inspection program. The Federation also relied on transcript evidence in other recent Commission proceedings by Mr G.T. Yarham (an officer of AMH) and Mr W.J. Curran (AMIEU Victoria Secretary) that industry practice has changed:

"The significant change which has occurred in practices in the industry is confirmed by the evidence of Mr G.T. Yarham given in other proceedings before the Commission on 5 November 1990, a transcript of which appears in MATFA 81, pp.44-47. We commend it to the Commission.

Even Mr Curran, Secretary of the Victorian Branch of the AMIEU, seems to accept the changes which have come about in the industry and the ability of employers to be able to provide a greater level of security of employment (see transcript of evidence given before the Commission in other proceedings, 19 October 1988, MATFA 81, pp.34-43). He acknowledges that the cyclical nature of the supply has lessened, that that has come about in part by market forces, that meat companies are better able to plan their production in advance, that feedlots have helped improve the situation, that there is now more permanence and security in the

_______________________________________________________________________________

(37)Exhibit MATFA 113, p.254 (38)ibid., pp.258, 259

40 INQUIRY INTO THE MEAT INDUSTRY

industry, that the meat industry is not the only industry affected by seasonal demands, that meat processors are now better able to plan for and control the amount of live stock, that award provisions already acknowledge an element of permanency, and that employers are able to give adequate notice of termination where that is necessary."(39)

The Federation contended that weekly hire would impact upon the management of meatworks, with greater effort devoted to planning and marketing activities. It would encourage a greater emphasis on more even supply of livestock and perhaps lead to an incentive arrangement between processing plants and livestock producers to achieve this end.

Whilst advocating the elimination of daily hire and movement towards greater permanency of employment in the industry, MATFA also sought the removal of restrictions currently applying to casual and part-time employment:

"Whilst great strides have been taken towards improving the "permanence"

of the industry, there will continue to be seasonal fluctuations in stock. There will therefore need to be built into any award regulation a necessary degree of flexibility to enable those fluctuations to be accommodated. One of the more obvious areas in which such flexibility can be provided is in the employment of casual and part time employees. Many

awards of the Commission contain undue restrictions on such employment. The QMIA and the SAMIA restrict employment of casuals to a maximum of four consecutive weeks (see MATFA 22B, pp.120, 122 and the actual award provisions reproduced in MATFA 81, pp.2 and 5). Such restrictions do not appear in the FMIA (MATFA 22B, pp.138-139). These awards also contain undue restrictions on the number of part-time employees that may be engaged and the maximum number of hours they may work. The Victorian Agreements (D 60, clause B1(D)(C)) require that a casual, after 3 days' employment as such, must become a daily hired employee, a fact also observed at transcript p.l64.

The Commission should endorse the principle that there should be no restriction on casual and part time employment other than by way of the general standards applicable to such employees."(40)

The Angliss Group advocated the removal of daily hire provisions in the industry and the establishment of weekly hire as the basic method of employee engagement together with the removal of restrictions currently applying to casual and part-time hire.

Angliss referred to the history of the 10% daily hire loading, tendering

at pp.7-14 of Exhibit S2 excerpts of transcript of Commission proceedings in 1961/1962 where employers, in seeking separate award coverage for export meatworks operations, argued that daily hire was necessary given the intermittent nature of the work at that time. The Company observed of those proceedings:

"It was argued strongly by the Employers involved in the case for a

separate Federal Award for Export Plants that daily hire was necessary and the 10 percent loading was not an exorbitant loading for the conditions that applied at the time. _______________________________________________________________________________

(39)ibid., pp.258, 259 (40)ibid., p.261

INQUIRY INTO THE MEAT INDUSTRY
41

However, as stated earlier, that was 30 years ago and to the extent that the conditions then applied, there is no similarity today. As the playing conditions have changed, so too should the rules. It is not necessary for daily hire to apply and so weekly employment should now be regarded as the norm for the Industry, along with provisions, without limitations, for casual and part time hire."(41)

The Angliss Group also submitted that the establishment of weekly hire would engender a greater feeling of security of workers within the industry which should in turn encourage greater commitment to it.

The NFF submitted that the interests of all associated with the meat industry (producers, processors, retailers and consumers) would be served by employment in the processing sector becoming more stable and secure:

"Producers believe that while we address all of the factors that go in to this inquiry, it is necessary to look a little behind the events and try to get some understanding of why the employment situation is so volatile and try to look at mechanisms to overcome these problems.

We believe it is in everybody's interest to make employment more stable and secure. That is not to say, that we are advocating some sort of 'job for life' for Meatworkers.

What we are advocating is that the regulation of employment be flexible enough to allow a given group of Employees to meet the throughput demands of the works and of course both the processors and producers need to explore mechanisms to permit them to use the capacity of abattoirs more fully than they do now. Clearly, developments such as feed lots and forward contracts fall into this area."(42)

"Surely, what is necessary for everyone involved in the industry is to get to a point where the plant is large enough to allow for its maximum utilisation in two, seven and a half hour shifts and using simple market forces to bring the stock forward at a sufficient rate to keep the plant going at maximum utilisation.

What is to stop the processors entering into contracts with producers to turn off so many head each month within a specified weight range. Why can't this industry do, on general scale what other industries do in securing their supply.

That then, creates the environment in which industrial relations reforms can be meaningful. It becomes worthwhile for management and labour to start talking to each other and while recognising the inherent conflict between them come to the point where they also recognise that the improved performance of their plant is ultimately the only possible chance they have of staying in business and keeping a job."(43)

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(41)Exhibit S1, p.31 (42)NFF written submissions, pp.23, 24 (43)ibid., pp.27, 28

42
INQUIRY INTO THE MEAT INDUSTRY

The Federal Government submitted that the system of daily hire in the industry should be abandoned. It noted that this employment method led to uncertainty of employment prospects for some employees each day, reliance on seniority as the primary determinant of relative job security, and contributed to the high level of industrial tension within the industry.

It advocated that employment move to a "permanent" basis. In doing so it accepted that livestock supply inconsistencies which are an industry feature at present would need to be addressed:

"On hiring arrangements, we believe that workers in the meat industry should be hired on a permanent basis, and we believe that efficiencies that will be gained through our proposals elsewhere, particularly in the payments system, can ensure that daily hire loading can be incorporated into wage levels.

The Commonwealth recognises that there are problems of inconsistent

supply which affect the capacity to provide permanent employment. However, it is our view that there is a fundamental responsibility for plant owners, suppliers and the industry as a whole to address the erratic nature of meat production."(44)

The Commonwealth highlighted stock procurement arrangements in New Zealand, Denmark and the United States, where contracts with producers ensured delivery of stock throughout the year and consequently greater stability of employment and production.

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INQUIRY INTO THE MEAT INDUSTRY 43

The ACTU strongly submitted that the tally systems (head tally/unit tally) which operate throughout the processing sectors of the industry should

continue to apply. It maintained that those systems had served both employers and employees well, and recognised the variable factors which impacted upon meatworks operations:

"The inspections we have seen across the industry, the operation of the

piece work system known as the tally system and the inspections have shown that the organisation of work in the processing sector is dependent on the following variables.

Firstly, production levels or requirements which vary according to seasonal and contractual factors. Secondly, plant design, thirdly, the number of workers employed and fourthly, the effective utilisation of mechanical aids. In recognition of these variables the piece work system has applied in this industry for many years having initially been sought by employers in the industry and opposed by the union.

Whilst the nature of the system may appear complex to outsiders, it was apparent in the course of the inspections that workers and management at a work place level with the one exception at Borthwicks in Portland, had a very clear understanding of how the system operated and how it is affected by what may appear to be quite small changes but which in fact have a major impact on individual and team workloads.

It is however clear from the inspections that the day to day

operation of such a system requires harmonious relationships and good consultative practices at a work place level."(45)

The ACTU nevertheless maintained that such piecework systems should not be "open-ended":

"Essentially the issue that has been highlighted in the course of the inspections, has been the amount of production that can be expected of

workers under this system. It is the view of the union and this was specifically referred to by the union delegates with respect to the Oakey Abattoir that the current rate of production which applies under the piece work job and finish system would not be capable of being sustained by workers required to work ordinary time work hours."(46)

The ACTU tendered a comprehensive set of decisions of the Commission going to Federal award regulation of the processing sector of the industry,

including the initial prohibition of the subsequent introduction of and variations/additions to tally systems. Exhibits D1 and D3 contain the decisions, which were summarised in respect to the tally system's operation in exhibit D34 as follows:

_______________________________________________________________________________

(45)ibid., p.895 (46)ibid., p.897

44 INQUIRY INTO THE MEAT INDUSTRY

"8. Austin C (1959-60) 93 CAR 659 (Exhibit D3, pp.17-52) Federal Meat Industry Award 1959 made on 3/2/60 in final settlement

of matters in dispute. Five previous awards superseded. (See D3, p.19, including Meat Industry [Shops and Smallgoods factories] Award and Federal Meat Industry Interim Award). Included a prohibition on piecework unless agreed by union or approved by Commission (see D3, p.26).

Austin C (1960-61) 96 CAR 509 (Exhibit D3, pp.53-66) Application by Cairns Meat Export Co for variation of FMIA 1959 re classifications for 'Can Pak' chain slaughtering system. Tasks described at D3, pp.56-58. Application by Cairns Meat Export Co for

tally/piecework system of payment refused (see D3, p.59). Claim by MATFA that slaughterers working on this system were not skilled but performing 'merely process work' was rejected (see D3, p58).

Austin C (1961) 98 CAR 228 (Exhibit D3, pp.61-62) The major Australian processors including Angliss, Borthwicks, Swift, Redbank etc. (formerly responding to State Awards) were made respondent to FMIA 1959 by consent. These were subsequently

respondents to the Slaughtering, Freezing and Processing Works (Meat Industry) Interim Award.

Austin C (1962) 100 CAR 122 (Exhibit D3, pp.63-69) Application by Union to vary Clause 12 FMIA 1959 re

prescription/introduction of piecework/tally systems. This was an attempt by the Union to establish equal rights over the operation of piecework systems.

According to the union piecework/tally systems were

widespread in the industry and the effect of the existing provision had been to exclude the union from involvement in setting the terms of those systems.

Commissioner Austin referred to the history of the provision

(D3, p.65) and noted the prohibition on piecework had existed as early as 1949, and this 'was a recognition of the objection to tally, piecework or contract methods of production in the meat industry' (D3, p.65). Subsequently in 1958 this had been modified by agreement between the parties.

On the grounds that the present clause was a consent matter and on the basis that only one works covered by the award worked a

tally system and that the union's claim that workers were not fully informed about all details of that system were not made out, the union's application was refused (D3, p.68).

There is reference in this decision to the disputes created in 1960 when the Can Pak system was arbitrarily introduced (D3, p.66).

The Commission refused to grant a tally system for employees on the slaughter floor on the grounds this would result in differential treatment of workers (D3, p.68).

INQUIRY INTO THE MEAT INDUSTRY 45

Austin C (1962) 100 CAR 305 (Exhibit D3, pp.70-109) This provided for a Slaughtering, Freezing and Processing Works (Meat Industry) Interim Award 1962 to apply to Borthwicks Merinda (Bowen), Angliss Works at Lakes Creek and Ross River and Swift Works at Alligator Creek and Parsons Point. It provided for union

consultation and agreement with respect to tallies and Commission approval if no union agreement was forthcoming (D3, p.96).

The Award was opposed by other employers and MATFA.

Gough C (1963) 102 CAR 171 (Exhibit D3, pp.110-180) This concerned the same employers (in 12 above) and related to wages, holidays and piecework arrangements about which there was agreement between the union and companies involved. MATFA opposed the application in particular the inclusion of maximum tallies (D3, p.ll2).

The manner in which the tally was calculated including adjustments made in respect to mechanical aids such as the hide puller, tail puller, aitch-bone cutter, automatic feed and discharge, are referred to in this decision (D3, p.ll4).

Slaughtering, boning and slicing tallies were included in the award including detailed descriptions of slicing tasks (D3, pp.l40-153).

Austin C (1962-63) 101 CAR 256 'Part III; Slaughtering, Freezing and Processing Works' inserted into FMIA 1959. Covered export meatworks respondent to 'Slaughtering, Freezing and Processing Works [Meat Industry] Interim Award 1962' made by Austin C 2/7/62. Part III at this time

only covered slaughtering as there could be no agreement around uniform boning tallies.

Nimmo JJ, Matthews C (1964) 107 CAR 588 Decision at first instance and subsequent appeals re uniform award coverage in Ham and Bacon industry. Question of uniformity answered in the affirmative with provision made for exemptions under certain circumstances.

Gough C (1966) 113 CAR 597 (Exhibit D3, pp.154-172) (Rail Boning Case) The Slaughtering, Freezing and Processing Workers (Meat Industry) Interim Award 1962 was varied to include

tallies for piecework boning by a team on conveyor or rail. This decision was of later significance for the Federal Meat Industry Interim Award 1965.

The areas in dispute between the parties are described in the decision (D3, p.l61) as around the level of tallies and provisions for 'overs' in excess of high tally. The union also expressed concern about boners not being trained in all tasks with the employers giving an assurance that they were happy to give boners the opportunity to learn additional tasks (D3, p.161).

The issue of problems in balancing piecework teams and combination of tasks was also referred to (D3, p.162).

46 INQUIRY INTO THE MEAT INDUSTRY

The working of 'overs' above high tally was granted only on the basis that this would be voluntary and an additional incentive provided of 37 1/2% rather than 33 1/3% (D3, p.l63).

Low and high tally production was set with it recognised 'the

basis of this opinion is essentially subjective. The Commission will be prepared to reconsider its decision if or when objective criteria such as those provided by detailed time and motion studies become available' (D3, p.164) and further 'the Commission is loath to depart from a known and trusted standard of reference without a

most thorough investigation of all its intricate structure. It might well be that the technique of time and motion study applied to each rail boning system could supply the basic material for such an investigation, which the Commission would be prepared to make at the instance of either party' (D3, p.164).

'Within the piecework scheme introduced by this decision "low

tally" represent (in terms of the unit equivalent mentioned earlier) the working effort in a day or shift required from a member of a rail boning team that would equal the effort reasonably to be expected of a time worker of average capacity working at a time work rate for a time work wage. This level of working effort leaves room for performance of both compulsory "overs" up to "high tally" (25% above "low

tally") and voluntary "overs" beyond that level.' (D3, p.l65)

'Skill, strength and stamina were envisaged as of average standard, the first for boners in the industry with relevant training, the second and third characteristics for such boners equally spread in the age grouping about 20 to about 55 years.' (D3, p.l65).

Commissioner Gough also referred to problems 'concerning tests designed to show the pace at which rail boning could reasonably be performed over an extended period by the teams the subject of this decision'. Those tests that were considered lacked

'rigour in the manner in which they were conducted' and relied upon co-operation of union members which was limited (D3, p.l65).

Gough C (1966) 115 CAR 612 (Exhibit D3, pp.173-180) Variation to the Slaughtering, Freezing and Processing Workers (Meat Industry) Interim Award 1962 regarding piecework provisions for boning and slicing of mutton lamb and veal.

There is reference again to minimum tally representing the working effort in a day or shift that could reasonably be required of boners equal to the 'effort reasonably to be expected of a time worker of average capacity working at a time work rate for a time work wage' of boners 'with relevant training' and spread in age 'about 20 to about 55 years'. (D3, p.l82)

Tallies set for boning different species were 'designed to provide the (same) effort equivalent'. (D3, p.l83)

INQUIRY INTO THE MEAT INDUSTRY 47

Detailed consideration was given to the different types of cuts and weight ranges appropriate (D3, pp.l84-190).

Gough C (1969-96) 126 CAR 715 (Exhibit 3A) [Gosford Meat Case] Dispute re Clause 12 of Federal Meat Industry Interim Award 1965. Boning tallies at Gosford Meats not agreed to by the Union or certified by Commission. General principles were established to govern implementation of boning tallies and associated slicing provisions.

(i) That approval would not be granted if employees were opposed

(ii) Where the basic tally represents a reasonable day's work for a time worker the upper limit on overs would be 25% of the tally

(iv) There would be higher payment for overs up to 25% and higher payment again for overs above that

(v) In computing tallies allowance should be made for the method of operation, the tasks to be performed, weights, quantity of meat, different sections being

Gough C (1970) 131 CAR 256 (Exhibit D3, pp.203-208) The question dealt with in this case was whether uniform tallies should prescribed in Federal Meat Industry Interim Award 1965, that

The Union had sought uniformity. Employers had sought

complete discretion for employers in terms of introducing or discontinuing piecework systems and different systems should be negotiated or arbitrated at each works. (D3, p.205)

At this time, 1969/70 it was 'clear that incentive schemes of one kind or another operate in the great majority of abattoirs, meatworks, boning rooms and prepacking establishments'. (D3 p205)

The Commission noted that the 'schemes differ widely and in

many respects, even between establishments of the one employer; that a large number of those schemes have been introduced by employers without the Union's agreement or the Commission's approval having first been obtained in accordance with Clause 12 of the Award; and that some informal arrangements (output "looked for"

or "expected" on the one hand and over awards on the other) exist which probably are also in breach of the Award'. (D3, pp.205-206)

The Commission noted a high degree of uniformity in NSW, Victoria and Queensland and a high degree of diversity in South Australia.

Therefore the Commission determined the formulation of a uniform tally scheme was practicable. (D3, p.206)

48 INQUIRY INTO THE MEAT INDUSTRY

It also supported the objective of achieving "equality of minimum earnings for certain amounts of effort" whilst accepting that a uniform scheme would need to be adapted to a variety of conditions. (D3, p.206)

The Commission also noted that there were circumstances where employees had accepted arrangements 'in which increased effort is not matched by the increased remuneration - to say nothing of the tendency of some such schemes to induce working that is excessive in tempo or duration or both'. Much has been said in favour of uniformity in wage rates throughout an industry, and much likewise can be said in favour of uniformity in the effort required of employees in return for a uniform minimum payment. One further advantage that would result from the uniformity sought by the Union is that employees would know exactly where they stood, which is

often far from being the case at present'. (D3, p.207)

Finally the Commission in directing the parties to confer added to the principles which had been laid down in the Gosford Meats Case by stating:

'(i) all employees whose tempo of work is geared to the speed of those (tally) operations should take part in that tally or piecework scheme;

(ii) once a tally system is introduced "the Union shall have equal rights with the employer to apply for modification or termination of the scheme in question.'

Gough C (1971) 139 CAR 229 (D34, Attachment A) Decision issued on 7 questions left unresolved following conferences of parties re implementation of uniform tallies in

This shows in terms of a number of questions the extensive

negotiation and consideration given over the years to the nature and the appropriateness of the tallies which currently apply e.g. questions 2 and 5.

Gough C (1971) 140 CAR 167 (Exhibit D3, pp.209-241)

The Federal Meat Industry Interim Award 1965 was varied to include a new Part III covering Piecework and Tally Systems in Boning rooms, Abattoirs, Prepacking Rooms Areas or Factories. The tallies were in line with decisions on uniformity. The variation was by consent.

DP Riordan 38 Hour Week Etc. Print H5521 3/11/88 (Exhibit D1, pp.71-133) The history of the development of the tally system was reviewed in the context of the application of the 38 hour week to the industry.

An excerpt from the 1983 Industry Assistance Commission

Report into the meat industry is set out (D1, pp.80-87). This contains reference to the early prohibition on piecework, subsequent negotiated schemes and the move to a uniform scheme. The 'extensive discussions between the parties as to a standard piecework tally system suitable for inclusion in the award' is

INQUIRY INTO THE MEAT INDUSTRY 49

referred to (D1, p.82). The IAC estimated 20% of meat processing employees were directly employed as pieceworkers in 1983. This did not include follow on labourers (D1, p.82).

There is also reference to tally adjustments made following the introduction of the Johnsons Downard Hide Puller in the mid-1970's (D1, p.86). DP Riordan refers to evidence regarding the

establishment of the present unit value tally system which when 'introduced in 1966 was the result of careful and proper assessment of the work by experienced management staff and consultation and negotiation with the AMIEU'. (Dl, p.88)

Evidence was called in this case by an engineer/management consultant regarding certain time trials (D1, pp.91-94) which the Commission ultimately found to be unsatisfactory as having been

performed in secret, outside the normal working environment and in relatively brief stages. (D1, pp.24-95)

DP Riordan reviews the history of the tally system in Federal Awards in the meat industry (D1, pp.95-102) and also refers to a number of decisions of the NSW Industrial Commission (D1, pp.lO2-190) in which similar issues were raised including in 1951 and 1952 arguments that because the work was finished earlier the

tally should be increased ie 'when a tally system exists as part of an incentive scheme with payment for overs, men speed up and on occasions when tally only is done they finish as quickly as possible in order that they may leave work'. (D1, p.107)

With respect to the argument put by the Union that 'the normal days work is reflected in the level fixed as the minimum tally'. (D1, p.108) DP Riordan said:

'There are substantial grounds for accepting that the tally fixed at the higher level exceeds the work which could

normally be expected in an ordinary day's work from employers who are paid on a time work basis. The evidence, material and argument advanced in this case has not convinced me there was any error in the findings of other tribunals over the years as to the equation between the productivity to be expected of time workers and the level of tally reasonably expected in an ordinary day's work without incentive. There is insufficient evidence in this case, however, for me to make a positive

finding that the minimum tally represents the normal day's work.' (D1, p.109)

The fact that in many abattoirs maximum tally is usually performed in less than eight hours a day the Deputy President noted 'is neither new or unusual in this industry'. (D1, p.110)

In response to new technology 'there have been agreed or arbitrated alterations to the manning level and the unit values of work concerned in order to arrive at the new relevant tally figure'. (D1, p.110)

The requirements of the work in terms of the heavy physical nature, bending etc. and precision required in exercising knife skills are detailed in the decision. (D1, pp.112-113)

50 INQUIRY INTO THE MEAT INDUSTRY

DP Riordan noted that 'the tally system is an integral part of the system of work performance in abattoirs and meatworks. It represents a clear and definitive incentive to employees to work at a fast pace for the whole period required to finish the allotted tasks. It is extremely doubtful, to say the least, that this pace of work would be maintained if this incentive were to be removed or significantly reduced. It would be open to argument that it would be unreasonable to expect employees to work at such a pace for 8 hours a day'. (D1, p.114)

Further, the Deputy President quotes from the January 1983 IAC Report which outlined the benefits to employers of the tally system in terms of providing 'an incentive to intensive labour

effort for the purpose of achieving tally'. (Dl, p.114)

He also notes that evidence put forward by employers referred to the same increase in tally that had been sought by employers in the Rail Boning Case. (D1, p.115)

DP Riordan (Second Restructuring Adjustment) Print J6776 19/2/91 (Attachment B to D34)

Deputy President Riordan referred to the benefits to employers arising from the operation of the tally system in the context of proposed changes to waiting time proffered by MATFA as follows:

'Most incentive or payment by results schemes are designed to achieve a greater level of production or improved performance

in respect of quality. The scheme known as the tally system, which operates in the meat processing industry, is designed to achieve two objectives.

The first is to ensure that all of the animals which are presented for slaughter, dressing and processing are processed at a high level of quality in accordance with the required specification.

The second objective is to provide an incentive to work at a speed so as to perform all of the work required and not

merely the minimum tally. The scheme has a minimum and maximum daily tally with the work performed in excess of the minimum being paid for at a higher rate.

The time in which the operation occurs is an important consideration. If the animals are not slaughtered or processed within the specified time there is an added cost to the employer. If the animals are not slaughtered on the day

on which they are presented they must be kept until the next day or perhaps for two or three days where a weekend or public holiday period is involved. If the meat is not boned after it has been slaughtered and dressed within the required time the capacity for further slaughtering on the next day is

affected. It is, therefore, of vital importance that the meat be processed after it is slaughtered within the appropriate time.

The speed at which the work is performed is set so as

to achieve the completion of the work in less time than the standard hours of work for the day with a tolerance allowed for certain delays which may occur.

INQUIRY INTO THE MEAT INDUSTRY 51

It is not disputed that the proposed variation to the payment of waiting time would cause a reduction in the earnings of pieceworkers. According to Mr Scholes, who

appeared on behalf of the Angliss Group, the elimination of waiting time would result in a reduction of 0.5 of 1% of payroll. There is no justification for such a reduction of employee earnings, having regard to the history and purpose of the provision. The result of the elimination of the

provision is that pieceworkers could, in some circumstances, be left waiting for extended periods with no work provided by the employer and receive no payment for that period. This would be unjust.

There is, therefore, no justification for the suggestion that the payment for waiting time represents double counting.'"(47)

The ACTU summarised its position in relation to the tally systems thus:

"Commissioner, we have gone to this history of the introduction of the tally system into this industry in some detail, both in our opening submissions and again today because it is important to recognise that the manner in which it was introduced, the unions experience of that introduction where it was introduced by employers for the benefit of

employers in terms of work organisation that they propose had led through extensive disputation and subsequently through negotiation and agreement and compromise to systems of work organisation and a tally system that currently operates in this industry.

Those consultation negotiations were extensive and detailed; they have often, from time to time, involved extensive and detailed consideration by this Commission. In summary, we have seen an initial prohibition on the introduction of piece work in the industry which proving ineffective was replaced by a provision seeking to control the introduction and operation of this system of work. This was sought to be achieved by requirements regarding consultation and negotiation with the union or the approval of the Commission.

Thereafter, given the reality in terms of preference for piece work by employers, the union and individual employers negotiated different tally schemes and these were included in awards of the Commission. This was often against the opposition of the Meat and Allied Trades Federation

due to the issues that had been negotiated with the union. The unions concerns in these negotiations have been consistent; they are to ensure that there are maximum production levels which can be expected of workers pursuant to these schemes and that there is appropriate remuneration awarded to employees in terms of the effort required and the skills exercised under these systems.

In terms of the Can Pak system of work, the union has also indicated from the start of the operation of that system a concern about the effect on deskilling workers. And that is a concern that you have

seen in the course of your inspections and that has been expressed by many union delegates and individual workers in the course of those

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52
INQUIRY INTO THE MEAT INDUSTRY

inspections. The union has also over this whole period sought the

introduction of a uniform scheme to ensure workers performing the same amount of work receive the same minimum rate of pay.

The tallies that have been included in awards and which currently apply have, as I said, been the subject of intensive and detailed consultation and regulation - consultation and negotiation as well as extensive consideration review and in certain circumstances, arbitration by this Commission. And this has been referred to in a number of the

decisions which we have referred you to. At this point in time, the union supports the continuation of the tally system as it applies in this industry."(48)

The ACTU also advocated the retention of both head tally and unit tally systems, submitting that results achieved in terms of production were similar under both:

"We believe that the comparison shows that whilst different systems apply, including the fact that Victoria has a fixed limit on production, there is little difference between the plants compared in overall production and in production per head of beef kill floor employee."(49)

"We are saying that whilst the different systems apply, we believe and we submit that in terms of overall production and also production per head per employee, there is no substantive difference caused by the operation of the two systems."(50)

The ACTU's proposals concerning retention of the "status quo" is encapsulated at pages 959-960 of transcript:

"The union, in terms of the operation of a revised part 3 of the Federal Meat Industry Award, that is, moving to a reduction in the number of awards which we seek to achieve by having consistency between awards, and we see as a first part of that the development of appropriate award regulation through part 3 of the Federal Meat Industry Award. We'll be seeking a continuation of the unit tally system.

But, however, we support the right of parties to negotiate with respect to appropriate head tally arrangements and would seek to have a requirement that such arrangements are brought to the Commission for endorsement. We submit that where an employer wishes to operate a head tally system - for instance, at Lobethal

• that there is a requirement on that employer to consult and reach agreement with the union or, in the absence of agreement, be required to seek the approval of the Commission with respect to the tally that should apply. And we submit this is consistent with the history of the award regulation of piece work that has applied in this industry."

_______________________________________________________________________________

(48)transcript, pp.954-955 (49)ibid., p.956 (50)ibid., p.958

INQUIRY INTO THE MEAT INDUSTRY 53

MATFA presented the inquiry with detailed submissions and witness evidence on the tally systems operating throughout the industry, including their history, their development (or lack of it), and problems, restrictions

and difficulties besetting the processing sector in today's environment as a result of their operation. The Federation's conclusions and proposals were contained in Exhibit MATFA 113 at pages 117-214 (volume I), 263-271 and 300-318 (volume II).

Deficiencies of both head and unit systems identified by the Federation included:

• that they were the greatest single source of
  

disputation in the industry. Their complexity led to differences in interpretation or understanding between plant management and employees;

• that they inhibit the efficient use of technology and are 
        ill-adapted
  

to mechanisation and the production-line approach. At the time of their introduction in federal awards in the early

1960's the nature of work was more physically demanding with limited mechanical aids; technological developments since that time with limited adjustment to tally values have meant that meatworkers today work less hard, for fewer hours, and for greater pay;

• that the systems breed an industry culture of:
  

" . . . management and union complacency, lack of unity of purpose, ignorance of the relative competitiveness of the

industry, focusing on the past rather than the future, negative attitudes to labour and training, seniority,

resistance to technological change, the 'slash-pack' mentality and an indifference to the quality of the product and the requirements of the customer . . . "(51)

• that payments made under each system
  

are based on inputs (number, weight, gender and condition of stock presented for processing) rather than production or quality of output. To this extent they are "back to front" as incentive schemes;

• that intransigent
  

union attitudes to adjustment of tally values inhibit technological improvements. Under the head tally system, as

output is based on processing of a given number of animals per "tally employee", should manning be reduced as a result of the introduction of technological advances, output is also reduced. Under the unit system the union resists alteration to unit values to compensate for technological improvements, and plant management

consequently receives minimal value for such improvements.

MATFA submitted that the tally systems operating in Victoria were particularly restrictive. It instanced witness evidence of relative costs of sheep dressing as between Victorian, NSW and Queensland thus:

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54 INQUIRY INTO THE MEAT INDUSTRY

"The cost differentials between Victoria and elsewhere are starkly and conclusively demonstrated by Sullivan in MATFA 28, paras 328-335. His evidence is supported by his detailed calculations in the Attachments to his Statement. In every case it is demonstrated that production costs in Victoria exceed production costs in other States. Consistent with the evidence referred to in paragraph A.10.5, the cost differential was most

marked in inverted sheep dressing and in boning. The cost of killing a certain number of sheep in Victoria on the inverted system was $7204 per day. In New South Wales (where there is also a head tally system) it was $5587.51 per day. This is a difference of 29%. The cost difference between beef side boning in Victoria and New South Wales was even greater, being 29.6%. These costings did not include on-costs which would compound the differential even further. In respect of at least Queensland they would have been compounded even further again if superannuation payments were included. A common Superannuation payment for slaughtermen in Queensland is something of the order of $15 per week. It is $31 per week in Victoria."(52)

The Federation also highlighted the greater costs of the boning function in processing works in Victoria when compared to other States, where a penalty of 50% applies to production between minimum and maximum tally:

"Boning is probably the area where Victoria is at its greatest disadvantage. Although the system is not the unit system, tally is based

on equivalents and weight ranges. Each carcass or part of a carcass is equated to one quarter of beef or sheep. The VMA does not contain a tally for beef rail (side or quarter) boning. The Agreement states that the tallies, and weight ranges in equivalents to apply, shall be established by Agreement. Hence different payment systems apply at different plants.

Payment for production processed above low tally (up to high tally) is set at double the low tally rate. Follow-on labourers receive 50% extra after low tally. Although there are slight variations from plant to plant, low tally is achieved in between 3 and 4 hours (MATFA 28, Sullivan, paras 309, 310, 312). As a result a boner in Victoria gets 100%

MATFA also noted that in addition to the complexities of the tally systems operating in the industry, those systems were also inadequate inasmuch as they were not exhaustive in terms of species processed at meatworks, e.g.:

• the VMA did not contain pig slaughter provisions, inverted mutton 
        dressing provisions or mutton
  

belt boning provisions;

• the FMIA part III contained no tallies for pig slaughtering or 
        sheep slaughtering;
  

• no federal award prescribes pork boning tallies, belt boning 
        tallies other than for beef, and rail boning
  

tallies other than for beef;

• no federal award prescribes tallies for horse or deer processing.
  

In many instances tally provisions which were specified in awards were out of date. A consequence of both of these factors was that the incidence of plant agreements outside the award system was high. _______________________________________________________________________________

(52)ibid., p.150 (53)ibid., p.148

INQUIRY INTO THE MEAT INDUSTRY
55

The Federation contended that the inflexibility of tally systems to adjust to different plant design configurations and equipment variations led to overmanning on a significant scale. With the unit tally system a reduction in timing values by 10% upon the system's introduction, together with an agreed adjustment to the unit formula of .149% to accommodate differences between the Union and employer as to what constituted a reasonable quantum of production, exacerbate this aspect.

MATFA also submitted that the tally systems obscured the concept of a "fair day's work", noting the difficulties experienced throughout the industry

"What is a fair day's work was, in a very real sense, at the heart of the

38 hour week case. In that case the Commission had to grapple with the concept of 'reducing' the working week from about 30-35 hours to 38 hours. That conceptual conundrum largely explains the tortured 4 year history of the 38 hour week in this industry since the AMIEU made application for a 38 hour week, 7.6 hour day in May 1987 (see Salter, MATFA 93, para 1). The fundamental problem, which is insoluble, was (and still is) the attempt to accommodate concepts of time into a system which is just not related to time at all."(54)

The Federation concludes that no attempt should be made to define "a fair day's work":

"Our submission is that it is not possible, nor is it desirable or even necessary, for the Commission to say what now represents or ought to represent a fair day's work. Even if the Commission could do so, it would vary considerably from plant to plant, and even from day to day at the same plant. Certainly at any given plant it would change as soon as new technology was introduced on that plant, or as soon as there is otherwise an alteration to the system of work which exists there."(55)

"The Commission will also be satisfied that any attempt to define 'a fair day's work' in this industry has inevitably led to conceptual contradictions, frustrations, inconsistencies, industrial action and worst of all, the further embedding of an insidious culture in the industrial psyche of this industry. No further attempt should be made to define what is a fair day's work."(56)

The compounding effect on wage increases of the tally systems and their penalty provisions was viewed as inequitable by MATFA:

"The tally system is so structured that a flat wage increase of $15 per week, with various compounding effects built into the system, results in an actual wage increase of much more than that for most piece-workers and some labourers in the industry, and as much as $30.95 for boners and slicers in Victoria. Not only does this result appear incompatible with recent National Wage Case decisions, it also causes resentment and animosity in workers in other areas of the plant who simply receive the

flat National Wage increase. It has also had the result of constantly expanding the differential between, for example, a slaughterman and a fitter."(57) _______________________________________________________________________________

(54)ibid., p.170 (55)ibid., p.167 (56)ibid., p.174 (57)ibid., p.175

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INQUIRY INTO THE MEAT INDUSTRY

The calculations used by the Federation in respect of the $30.95 increases to Boners and Slicers in Victoria are contained in a table at page 177 of Exhibit MATFA 113.

Despite the manifold faults it identified with tally systems, MATFA did not advocate their total abandonment. Whilst seeking an award based on timework, prescribing minimum rates of pay and providing for weekly rather than daily hire, the Federation sought retention of such systems:

"It may well be that ultimately time work should and will prevail, but there is evidence from significant operators in the industry that they wish to conduct their operations with a tally system. We are constrained to submit that continuing provision should be made for that to occur. However, neither those employers nor the union should stand in the way of other employers willing and able to implement time work."(58)

The Federation further submitted that alternative incentive schemes should be encouraged in the industry:

"As part of the move to flexibility and genuine enterprise bargaining the Commission should encourage the development of alternative productivity based schemes which do not have the inherent limitations of the tally system . . .

Any such schemes should be directed towards quality output rather than input, should provide incentives to reduce manning, incentives to work a full day, and incentives to employees to acquire a wider range of skills."(59)

MATFA proposed that tally systems should remain available to employers by way of appendices to the proposed timework award, and that other incentive schemes should be made available by way of S.115 agreement. In relation to tally systems it advocated that:

• "The interim unit tally scheme should be based on those currently in Federal Awards, with interim slaughtering unit tallies being based on the existing award tallies in the Portland Award (with some minor modifications), and in respect of conventional sheep and goat boning the South Australian Meatworks Industrial Agreement Award."(60)

• "Interim head tally should be based on the NSW system but the

quantum of the tally should be increased so that the rate of pay under the NSW head system will equate to that currently applying under the Federal unit system for maximum tally. The head tally systems in NSW awards are the most recently adjudicated awards."(61)

• such tally systems should provide for a single rate of
  

tally only, not low/high or minimum/maximum as prescribed under the present systems, that that single rate should equate to current high and maximum tallies, and:

_______________________________________________________________________________

(58)ibid., p.263 (59)ibid., p.265 (60)ibid., p.304 (61)ibid., p.306

INQUIRY INTO THE MEAT INDUSTRY 57

"With the single tally there should be an ability to present less than tally, provided that on any one day, regardless of the amount actually processed, employees will be paid not less than one-fifth of the weekly award minimum rate."(62)

• " . . . the tally rate applicable to the highest classification under the new award should be the rate applicable to the existing maximum tally rate paid to the highest grade of slaughterman and/or boner under the present awards. The tally rates payable to other levels of persons employed in the piece work team should be fixed

in the same proportion as the weekly rates in the new award bear to the highest weekly rate for the non-tradesmen. Such an approach is conceptually the opposite to the way in which maximum tally rates are currently calculated, that is by increasing the minimum tally rate (one-fifth of the weekly rate, increased by 10% for daily

hire) prescribed by the award by a certain mathematical formula contained in the award. Where there is only one tally, and that tally is to be equated with current maximum tally, and there is to be no minimum tally, then mathematical formula such as currently applies cannot be used."(63)

• penalties for gender, weight and condition which
  

are currently expressed as multiples of unit or head values " . . . should be expressed as money equivalents and not subject to compounding according to the stage at which the beast is being processed . . . "(64)

• current "waiting time" provisions should be deleted or 
        alternatively should not be prescribed where tally
  

is achieved within ordinary hours;

• no production limitations should apply to such schemes; and
  

• "The Commission should indicate that where a tally scheme is adopted under the Appendix or certified by Agreement under section 115, and where the employer works a 19 day month, the daily tally should be altered by the percentage figure that the number of daily hours actually worked bears to 7.6 (e.g., an 8 hour day would result in a

5.26% tally increase). We do not suggest that the method of implementing the 38 hour week ordered by the Full Bench in September 1989 be otherwise disturbed."(65)

The Angliss Group of companies advocated the abandonment of the tally systems of payment for the processing sector and their replacement by timework.

The Group noted its close involvement in the establishment of the current unit system in the early 1960's, the limited changes to that system which had occurred since then despite technological advances and changing market requirements, and submitted that dramatic change should now occur:

"It is widely recognised that changes are necessary and they are necessary sooner than later. The Angliss Group has been directly involved for over

_______________________________________________________________________________

(62)ibid., p.304 (63)ibid. (64)ibid., p.312 (65)ibid., p.317

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INQUIRY INTO THE MEAT INDUSTRY

30 years with the Federal Award coverage within the processing sector.

This company was a major party behind the drive for a separate Federal Award for the processing sector. The Company established initial tallies for on-rail slaughtering and with the introduction of the Can-pak System in the early 1960's established the present unit values for beef slaughtering and was the notifier in respect to having the tallies for rail boning established in 1966. The tallies for the conventional sheep/lamb dressing system were established at the Company's Riverstone

The provisions are very much the same today as they were in the 1960's within the Awards and it is accepted that now is the time for change and such change needs to be of major consequence."(66)

The Group provided the inquiry with a brief summary of the methodology used to establish initial "can-pak" slaughtering tallies:

"The present unit values for various Can-Pak tasks were established at this company's plant in Rockhampton in 1965, and early 1966. The manner in which the tallies were established was carried out by a Mr Ballard who was the plant Industrial Officer. Mr Ballard timed each task a minimum of ten times, he established then an average time for each task and then divided that time into 25,200, being seconds in a seven hour working day. The resultant figures then gave what was known as the minimum number of head per slaughtermen per task. This figure was then reduced by 10% by Mr Ballard to cover any intangible factors and to allow for any error that he may have created. Once these figures were then established

Mr Ballard negotiated the situation with the then Plant Secretary Mr Johnson.

This procedure is contained in evidence given by Mr Ballard in Matters C 4150 to 4158 of 1987 and 4510 of 1987 on 22 June 1988 at pages 1792 to 1794.

As a result of negotiations between these two people the final unit values were established which provided for a tally of 14 head per slaughterman. All this time though, Mr Johnson had firmly in his mind that the maximum throughput for a minimum tally basis would be 13 1/2 head per slaughterman.

The parties were therefore faced with a situation of one side suggesting that 13 1/2 was the upper limit and the other side suggesting that 14 head per slaughterman was the limit as a result of the figures agreed upon. This position remained a stalemate, it required the presence

of outside company personnel and union officials to negotiate the position and as a compromise, a figure of 13.75 head per slaughterman was agreed upon. The problem was then created as to how to make the unit values add up to 13.75. At the time it was considered that some of the more difficult tasks should be adjusted and it was further discussed that by not altering the agreed positions for each individual task and by allowing a factor of .149 to be used in the computation of the teams, then all members of the team would benefit as a result of this figure.

As you can see, there was no real technical work involved in the establishment of the present Can-Pak tallies, however they have been used

since then and are still operating."(67) _______________________________________________________________________________

(66)Exhibit S1, p.1 (67)ibid., p.4

INQUIRY INTO THE MEAT INDUSTRY 59

Its current attitude to that system was summarised as follows:

"As explained earlier, the original setting of the individual task values for Beef Slaughtering was done at one location and predominantly between two people. The boning tally was a subjective decision in the absence of objective criteria such as detailed time and motion studies. In the

establishment of a Can-pak team the calculations are taken to four decimal places, ie to one/thousandths of a person. This, when looked at realistically, cannot be taken seriously. It may seem strange for such a submission to come from the Company who instigated the whole scheme but at least we have the courage of conviction to now admit it."(68)

"However, with all of the problems that have been exposed during this Inquiry, we firmly believe that with continuity in employment (weekly hire) and uniformity in wages (time work earnings) then the Industry would be on a more solid foundation to build a more stable structure which would lead to improved productivity and efficiencies. In doing so

it would therefore create more fulfilling employment opportunities for all workers in the Industry."(69)

The NFF sought the removal of piecework prescriptions from basic award provisions. It advocated a single industry award prescribing minimum rates and conditions with enterprise arrangements negotiated at the plant level, including tally systems should they suit operations at individual establishments.

The NFF noted that the industry was disparate in nature and characteristics, and consequently should not be bound by a common set of working arrangements:

"Any regulation must recognise the huge variation that exists in this industry, and you've seen it on your inspections.

There's the big seasonal sheds in the north of Australia; there's the small domestic meatworks; there's all the range in between. There's the variations caused by the climate in which the enterprise operates. There's the different sort of enterprises, depending on the livestock being killed, and so on. There's export and domestic.

There's a whole range of variation, and what we're putting to the Commission very earnestly is that, while we say, look, there should be a minimum standard, that any person who goes into the meat industry knows that as a minimum they're going to get this much leave; as a minimum

they're going to get this much rate of pay for doing this job; all of those factors.

But the rest of it should be allowed to be worked out at the level where the differences are known and understood between the various works.

And we say in there that, as far as piece-work arrangements and so on are concerned, they shouldn't be in the award, because we see that as being a

_______________________________________________________________________________

(68)ibid., p.31 (69)ibid., p.32

60 INQUIRY INTO THE MEAT INDUSTRY

great area of opportunity to start to encourage and develop on both sides the skills at an enterprise level to start talking to each other about

The Federation considered that a move in this direction would encourage

employers and employees to focus on their individual operations and measures to enhance efficiency and productivity at plant level, with associated improvement in both profitability and worker remuneration and job satisfaction.

The Commonwealth noted that the operation of tally systems was a major source of disputation in the meat industry, with data collected by the Department of Industrial Relations attributing 25% of disputation between May 1988 and May 1989 to these systems. It also noted that extensive criticism had been levelled at tally systems, particularly by livestock producers and processors, principally on the basis of:

• disincentive to technological
  

development and investment as benefits flow mainly to employees;

• increased occupational health and safety risks due to emphasis on
  

• restrictions on workforce multiskilling prospects.
  

In its written submission to the Inquiry the Commonwealth proposed that the tally systems be reviewed in the light of those criticisms and the difficulties surrounding their operation, with a view to making such systems more responsive and flexible to meet technological advances and changes in industry requirements and circumstances.

At Appendix C to the written submission the advantages and disadvantages

of incentive schemes are canvassed, together with a summation of industries where award coverage of such schemes occur. A summation of the tally systems applying in the meat industry, difficulties associated with them and issues which should be addressed in reviewing their operation appear at Attachment 3.

Following the tripartite overseas mission the Commonwealth made further, formal submissions to the inquiry in which it advocated that:

"However, following the recent tripartite overseas mission which examined

meat industry operations in a number of other countries, the Commonwealth Government believes that it would be preferable to move away from the tally altogether, and introduce alternative payment systems in the industry, along with a move to permanent rather than daily hire for its employees.

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INQUIRY INTO THE MEAT INDUSTRY 61

At the same time, the Commonwealth also recognises that such a move should not be approached in a negative cost-cutting way, that is, it should not be a vehicle for reducing income or lowering the standard of employment conditions for employees in the industry.

The move should ensure that employee earnings in the industry are at a minimum maintained, and that there is potential for earnings to increase with adoption of new working arrangements, new technology and

A move away from tally in conjunction with a comprehensive review of work organisation and work practices is required for the industry to improve its overall productivity and efficiency. Furthermore, it's the

Commonwealth's view that significant productivity gains in industry are likely to also flow from improved investment practices and improved plant capacity in the industry, as well as reform of employment and working conditions, including adoption of a new payment system.

It would appear that the complexities of the tally system are not conducive to the meat industry achieving world standard levels of efficiency and productivity. No other country viewed by the mission had as complex a piece-rate payment system as the tally or daily hire practices in place in Australia. A more straightforward piece-rate system - payment system was used in Denmark; alternatively time-based payment operated in the USA and Germany. In addition, the meat industry in all other countries visited operated on a permanent hire basis.

Adopting a less complex payment by results system, but in the context of a more secure employment environment in Australia would appear

to offer several advantages, including retention of incentives for either individuals or teams to increase output, along with mitigating many of the problems outlined above. In particular, it would remove the effective barrier to investment and introduction of new technology which has been associated with the tally."(71)

_______________________________________________________________________________

62 INQUIRY INTO THE MEAT INDUSTRY

The ACTU presented the inquiry with comprehensive material going to the history of award regulation in the meat industry, including the introduction of the tally payment system in the processing sector. That material is contained principally in Exhibit D3, and comprises decisions of the Commission relating to (inter alia) the establishment of penalty values for various stock classes and conditions. The Council spoke to such decisions in detail as establishing dicta upon which the values currently prescribed in awards are based, e.g. The

Gosford Meat Case (126 CAR 715, tendered as Exhibit D3A) which formulated principles the Commission would follow in considering incentive schemes. Principle 7 provides:

"In the computation of tallies allowance of some kind should be made for

(a) general method of operation: e.g. chain system of boning as

(b) style of operation: e.g. fleecing out on rail as against trunking method of boning mutton and veal

(c) specification of task: e.g. boning for piecemeats against

canner cut; or slicing to specified fat content (export) as against slicing for local market

(e) quality of meat handled: e.g. bull or ram as against ox or

(g) part as against whole; e.g. trunk as against carcass of mutton or veal

A further decision highlighted by the ACTU, contained at pp.15-20 of Exhibit D34, related to uniformity of tally systems and includes the following

"Again, the Commission has been well acquainted, almost from their inception, with the principles on which these elaborate schedules have been based (originally in the Slaughtering etc. Award) and with the whole history of their application in practice. The totality of weight ranges and equivalents was closely integrated by the founding fathers of the original boning scheme (for beef on table). Although the adding of, say, one weight range in each category below, and one ostensibly balancing it above, the existing weight ranges, with proportionate calculations of arithmetical probity, would appear to be fair and reasonable, the changes effected in the amount of work to be done by boners and their slicers could be far-reaching indeed. As in dealing with the Second Question above, the Commission would say that, if the weights of sides, quarters

_______________________________________________________________________________

INQUIRY INTO THE MEAT INDUSTRY 63

and pieces of beef coming to be boned under the two awards can be shown, beyond reasonable doubt, to differ substantially, the parties might see fit to recast the tally or piece-work scheme completely with regard to weight ranges and to piece and unit equivalents. In the meantime the existing pattern therein should remain."(73)

The Council observed that penalty values contained in the decisions reflected both agreed and arbitrated levels, and submitted that any alteration to the values established must involve a detailed review of work performed against the rules or principles set or accepted by the Commission.

MATFA contended that there was urgent need for a thorough review of gender, weight and disability penalties currently prescribed in awards throughout the industry. It submitted that many existing penalties are excessive or unwarranted in modern processing plants, although they may have been appropriate under the old "bed and cradle" slaughtering system where a much greater physical effort was required to process the animals:

"The concept of counting a heavy bull as a penalty originated in the solo bed dressing of cattle and has as much to do with the pushing and pulling of the carcass as with the slaughter and dressing of it. On the modern on-rail dressing line, it is unrealistic to argue that a bull takes twice as much effort or twice as long to dress as a standard bovine animal as implied by the awards under which one bull equals two head. Such provisions mean that if minimum tally is processed, a bull is required to be paid at 2 1/4 time the ordinary rate of one head and if maximum tally is processed the rate compounds so that the bull is required to be paid at 2 1/2 times the ordinary rate. This practice compounds the penalty which should be avoided (Gooley, MATFA 25, para 61; Hughes, MATFA 33,

para 86). This also occurs on overweight penalties (Hughes, para 86)."(74)

It further submitted that in instances where penalties were found to be warranted they should be expressed as a monetary value, rather than a unit multiple of a "normal" or "average" beast as at present under the tally systems in operation, and that such a penalty payment should be restricted to workers

who actually expend extra effort due to the penalty factor rather than applying it to all workers on the chain (including follow-on labour) as presently applies.

Witness evidence adduced by MATFA contended that current penalties applying in slaughter, boning and slicing functions were not objectively based and had no regard to work actually performed or the incidence of differences in effort or complexity of such work.

The Federation submitted that penalty provisions create anomalies in production costs:

"Both Gooley and Hughes expressed the view that award provisions do not adequately cover the full range of product presented for boning, and in particular, that there was inadequate provision for light young yearling beef or veal (Gooley, MATFA 25, paras 101-107; Hughes, MATFA 33,

_______________________________________________________________________________

(73)Exhibit D34, p.18 (74)Exhibit MATFA 113, p.185

64 INQUIRY INTO THE MEAT INDUSTRY

para 90). Hughes makes the same comment in respect to the slaughterfloor. He graphically illustrates these deficiencies by indicating that it costs as much to bone a side of 75 pounds as it does to bone one of 200 pounds. It also costs the same to kill an animal to recover 655 pounds, as it does to kill an animal which produces about 100 pounds (paras

MATFA noted that under the system operating in Victoria penalty factors may have greater impact than in other States:

"As we have come to expect, the current practice in Victoria takes gender penalties into the realm of the ridiculous. There, all bulls over 136 kilograms with no age restrictions are counted as the equivalent of two head. This includes uncastrated calves which might be put on improved pasture or supplement fed conditions and marketed as vealers/yearlings

The Federation also submitted that penalties applicable to disabilities associated with sheep slaughter were in urgent need of review:

"The evidence from Gooley and Sullivan is that there are a wide variety of on-plant arrangements for the payment of sheep disability penalties, and that where there are award provisions, those provisions are to applied. We have seen also that the "agreed" percentage for disabilities in sheep are paid to all sheep, they are paid even for lambs, and in Victoria, for calves, and they no longer, if they ever did, reflect reality. Gooley said that since these penalty provisions were originally conceived, there have been considerable changes in pre-slaughter inspections by veterinarians or other responsible persons, improved pre-slaughter facilities, breeding improvements, promotion of lamb on domestic and export markets, greater emphasis on sale of wool, and the introduction of

animal welfare practices on farm, in transit and at abattoirs (MATFA 25, para 69)."(77)

MATFA advocated the prescription of an allowance of 7.5% to cover all sheep disability penalties, as was determined by the Full Bench in the Borthwicks Portland (Interim) Award, and as has been prescribed by the Queensland Tribunal in respect of the Brisbane Abattoir (State) Award.

Neither the Angliss Group of Companies nor the intervening parties addressed the specific issues of weight, gender and disability penalties in their submissions.

_______________________________________________________________________________

(75)ibid., pp.189, 190 (76)ibid., p.185 (77)ibid., pp.312, 313

INQUIRY INTO THE MEAT INDUSTRY 65

The ACTU submitted that plant or enterprise agreements had traditionally been a feature of the processing sector of the industry, and that such agreements should continue and be codified under the provisions of s.115 of the Act:

"I would now turn to another issue which the union believes needs to be dealt with in the course of this inquiry. In the course of the - that is that in the course of establishing an appropriate system of wage fixation, an award regulation in this industry, setting appropriate minimum award rates, we would also seek a clear direction from the Commission regarding the parties ability to enter into enterprise

agreements. That is that we say that in terms of setting appropriate award regulation in this industry, the Commission needs to be concerned with the inter-relationship between awards and enterprise agreements in this industry.

There has been a history of enterprise agreements and a range of enterprise awards in this industry. And it is the unions submission that we would seek a clear direction from the Commission regarding the parties continuing ability to enter into enterprise agreements and have those agreements properly dealt with by the Commission."(78)

The Council provided the inquiry with background material going to the operation of s.115 agreements, including:

• transcript excerpts
  

of ACTU submissions to the February 1989 wage fixation principles review, excerpts of the Review Full Bench

decision, excerpts of the August 1989 National Wage decision, and recent Commission decisions on s.115 agreements (Exhibit D4);

• material distributed to ACTU affiliates concerning the operation of 
        s.115 (Exhibit D58);
  

and

• material put to the February 1989 Review Full Bench concerning 
        s.115 agreements by the Federal Government
  

(Exhibit D59).

The ACTU submitted that s.115 agreements should be available to individual enterprises or groups of enterprises where common circumstances apply, provided that tests required by the Act and the Commission are met:

"Ms Doran: Addressing this issue in our opening submissions, we submitted that there is a role for section 115 agreements in this industry, and, in fact, there is a history of single enterprise awards in the industry. They can be entered into on an enterprise basis or beyond a single employer, where employers have common circumstances and environments. The rates contained in such agreements cannot be relied upon in establishing minimum rates in awards and may reflect actual rates paid or an additional amount to apply by agreement to minimum rates. They must also meet the criteria set out in the Act, that is they must be by agreement, not arbitration.

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66 INQUIRY INTO THE MEAT INDUSTRY

They cannot bind a non-consenting party. If inconsistent with the Principles, they need to be dealt with by a Full Bench. They must contain a dispute resolution procedure. They should not undermine the principles. There should be no possibility of flow-on, including commitments from peak councils. The parties must have freely entered into the agreement and they should be for a fixed term. This is a matter which the union will be returning to in more detail, but I would emphasise that from the start and in our opening submissions the union has put very strongly that the issue of addressing how the Commission with respect to this industry

deals with the issue of agreements reached at an enterprise level, is one which we see that needs to be addressed in the context of a national framework of award regulation in this industry.

That has been the union's position since May 1990 when these matters were put on transcript for the first time. For the Commission's information, applications regarding a number of such agreements have been filed by the union and have recently been dealt with by Commissioner

Merriman and we will be going specifically to the nature of the agreement that has been sought in those other proceedings and making submissions about how those matters should be dealt with in our subsequent submissions to this inquiry.

The Commissioner: Ms Doran, do you see any conflict between your desire to have nationally consistent standards and section 115 enterprise agreements?

Ms Doran: We say it goes to the method in which the Commission is going to deal with enterprise bargaining arrangements that have been foreshadowed certainly by the ACTU in the context of the next system of wage fixation, and that they need to be addressed in a consistent manner and there has to be a framework for dealing with them, but there is no inconsistency with having a system that has appropriate minimum rates in awards, plus the capacity for the parties to freely enter into enterprise arrangements and I think really the issue is to be one of flow-on and commitment by the unions with that respect and it also is based on the development of a proper minimum award framework."(79)

The Council also advised the inquiry that s.115 applications in respect of a number of Victorian meatworks were the subject of separate proceedings within the Commission, and tendered a copy of the agreement reached with the

Victorian companies (Exhibit D60). The ACTU sought the endorsement of the Inquiry to the availability and appropriateness of agreements under s.115 to the meat industry generally, and in particular, endorsement of the agreement reached with some employers in Victoria:

"We seek from this inquiry, firstly, a clear statement from the Commission as to the appropriateness of section 115 agreements in this industry. Secondly, the circumstances in which they will be approved. This is to provide a clear direction to the parties in this industry of whether or not they are going to be given the opportunity to have the benefits of those new arrangements that we have referred to.

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INQUIRY INTO THE MEAT INDUSTRY 67

We would also seek a recommendation with respect to this particular agreement in terms of its meeting the Commission's requirements in terms of the operation of section 115 agreements in this industry. We submit, Commissioner, that workers are entitled to ask this Commission whether the Commission will only ever endorse wages and conditions which are lower than prevailing standards which we submit has happened at the Borthwicks Portland plant where a non-award standard in terms of sheep

slaughtering was included in an award of the Commission, that being a provision that had been fought vigorously by the union."(80)

MATFA submitted that, with the introduction of a single minimum rates award in the industry, individual employers should have the opportunity to negotiate with employees emoluments and production levels in excess of minimum standards prescribed, subject to acceptance by the Commission of any agreements reached as satisfying the requirements of s.115 of the Act.

The Federation advocated that any such agreements should be strictly controlled by the Commission, and must meet minimum requirements that:

• they provide for remuneration and production levels no less than 
        those prescribed in the award,
  

or in the Appendices to the award detailing interim tally systems;

• they must be open to scrutiny by the
  

Commission and be arbitrated under s.115; and

• the Commission must be satisfied that the agreement is
  

genuine and not reached as a result of industrial duress.

It maintained that close supervision by the Commission was necessary in light of the industrial history of the industry, which revealed an inability of the parties to negotiate responsibly, particularly in Victoria where "enterprise capitulation" was a characteristic:

"The parties on both sides have not developed sufficient maturity to be given a free and unlimited hand in enterprise bargaining. Indeed, the Victorian sector of the industry needs protection from itself and from the enterprise capitulation which has been enforced upon it."(81)

The MATFA submission went further. It advocated that the Commission should vary the dispute findings upon which this inquiry is based to encompass the totality of the industry not currently regulated by State Industrial Tribunals. In this way, the Federation sought the handing down by the Full Bench of an award which would have common rule effect in circumstances where State awards do not apply:

"The totality of the evidence before the Commission now justifies the following further formal findings of dispute:

(1) For the purposes of this finding, 'the meat industry' means all processes or activities in or in connection with the slaughtering and processing of animals of any description,

_______________________________________________________________________________

(80)ibid., p.1121 (81)Exhibit MATFA 113, p.218

68 INQUIRY INTO THE MEAT INDUSTRY

the boning of animal carcasses, the slicing, cutting, grinding or other processing and packing of meat and meat products, the treatment of animal by-products including the curing of skins and hides, the manufacture of smallgoods, including ham and bacon, and the preparation for sale and the

sale by wholesale or retail of meat and meat products.

(2) In addition to the disputes found to exist in matter C No. 4639 of 1986 and matter C No. 22952 of 1988, there exist the following further disputes, namely:

(a) An actual dispute between the Australasian Meat Industry Employees Union ('the union') on the one hand and all employers whose principal business is that of

the meat industry or some part of it, on the other hand. The subject matter of the said dispute is the wages and conditions of employment of all employees employed by such employers. The dispute extends throughout the Commonwealth of Australia.

(b) A threatened, impending and probable dispute, and a situation that is likely to give rise to an industrial

dispute between the union on the one hand and all employers, both present and future, whose principal

business is or may become that of the meat industry or some part of it, on the other hand. The subject matter of the said dispute is the wages and conditions of

employment of all employees, both present and future, employed or to be employed by any such employers. The dispute and the situation extends throughout the Commonwealth of Australia.

We submit that the dispute findings previously made should now formally be varied in the terms suggested, pursuant to section 101 of the Industrial Relations Act. This would enable the Commission to make an award effectively binding the industry in parts of Australia where it

In settlement of that dispute, and subject to the qualifications mentioned below, the Commission should now make a single award containing the following 'Parties Bound' clauses. The opening clause applicable to all Divisions should read as follows:

(a) The Australasian Meat Industry Employees Union ('the union') and its members;

(b) The Meat and Allied Trades Federation of Australia and its members and all employers whose principal business

is or may at any time be that of the meat industry or any part thereof.

(2) This award is binding on the parties mentioned in paragraph (b) of subclause (1) in respect of all employees employed in

the meat industry, whether members of the union or not.

INQUIRY INTO THE MEAT INDUSTRY 69

(3) This award applies throughout the Commonwealth of Australia.

(4) This award shall not apply to an employer who, on the (date of commencement of award) was bound by any of the following

Butchers' Wholesale (Newcastle & Northern) Award Butchers' Wholesale (Country) Award Butchers' Wholesale (Wagga) Award

Butchers' Wholesale (Cumberland) Award Broken Hill Meat Industry Agreement Butchers' Wholesale (Gosford Abattoir Central Coast Cold Stores) Award

Brisbane Abattoir Award District Abattoir Boards Award

(5) For the purposes of this clause 'the meat industry' means all processes or activities in or in connection with the slaughtering and processing of animals of any description, the boning of animal carcasses, the slicing, cutting, grinding or other processing and packing of meat and meat products, the treatment of animal by-products including the curing of skins and hides, the manufacture of smallgoods, including ham and bacon, and the preparation for sale and the sale by wholesale or retail of meat and meat products.

At the beginning of each Division of the Award there should appear the following clauses:

This Division of the award applies only to the business or that part of the business of an employer bound by this award which is or includes or may at any time be or include the preparation for sale and the sale by wholesale or retail of meat or meat products, and activities incidental hereto.

70 INQUIRY INTO THE MEAT INDUSTRY

This Division of the award applies only to the business or that part of the business of any employer bound by this award which is or includes or may at any time be or include the manufacture of smallgoods, including ham and bacon, and activities incidental thereto.

(1) This Division of the award applies only to the business or

that part of the business of an employer bound by this award which is or includes or may at any time be or include the slaughtering or processing of animals of any description, the boning of animal carcasses, the slicing, cutting, grinding or other processing and packaging of meat and meat products and

the treatment of animal by-products including the curing of skins and hides, and any activities incidental thereto.

(2) This Division of the award operates only in the States of Queensland, Victoria and South Australia and New South Wales to the extent of the Federal Meat Industry Award 1981 as it currently operates."(82)

In support of this part of its submissions MATFA relied upon the dispute prevention powers of the Commission (citing s.3(b) and (d), the definition of "industrial dispute" in s.4(1) and s.4(3)(c), and s.89 of the Industrial Relations Act 1988). Whilst it noted the decision recorded at [1910] HCA 53; 11 CLR 311 (1910) in Australian Boot Trade Employees Federation v Whybrow precluding common rule extension of Federal Awards other than within a Commonwealth Territory, the Federation submitted that:

"An award made in those terms will have the same effect as a common rule, but will not be a common rule in the sense considered by the High Court in Whybrow's Case (ibid), namely the extension of an existing award by common rule to other employers. Here, the award would be made binding directly on parties defined in part by reference to the class of employers who are found to be parties to a dispute in the extended sense

contemplated by the Act. The principal defect of the procedure in Whybrow's Case was that the common rule procedure could not be used to prevent disputes in general: there could be no arbitration without parties (see Barton J at p.324, O'Connor J at p.329, and Higgins J at p.343). As Higgins J observed, the proceeding there in question - the extension of an award by common rule - was where there was no dispute to be settled, and no dispute in prospect to be prevented. In other words it was merely the extension of an existing award.

In this case, however, the award would be partly in settlement of an existing dispute and for the purposes of preventing future disputes arising between an identified class of employers and employees. This would be so particularly if the Commission were to include the key dispute prevention and settlement provisions which are advocated in Part C.9 of this submission.

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INQUIRY INTO THE MEAT INDUSTRY 71

The only dictum contained in Whybrow's Case which might suggest that the Commission cannot take the course we propose is that of Barton J at p.324, where he suggests that there cannot be arbitration for the prevention of a dispute. However, Issacs J (pp 330-332) and Higgins J (p.340) both hold to the contrary, to the effect that there is nothing in the Constitution which indicates a want of connection between 'arbitration' and 'prevention', and that in their view, arbitration can occur before there is an actual dispute. In short, we distinguish Whybrow's Case on the facts.

On the other hand, the High Court in Re Federated Storemen and Packers Union of Australia; Ex parte Wooldumpers (Victoria) Ltd [1989] HCA 10; (1989) 166 CLR 311 has made it clear that it will take a broad view of the dispute settling and prevention powers of the Commission. At p.318,

' . . . the award-making power may be subject to fewer restrictions where the Commission is exercising that power for the purpose of preventing a threatened or impending dispute or further disputes.

In that context it may be appropriate to allow the Commission a considerable degree of latitude in assessing what is necessary or expedient for the purpose of preventing the dispute or disputes.

It follows from what I have said that the concept of ambit does not precisely or adequately express the scope of the

Commission's award-making power under section 55 (Conciliation and Arbitration Act 1904).'

'The Act confers power on the Commission to prevent, as well as settle industrial disputes in the sense defined . . . This statutory power is, accordingly, confined to the prevention (and settlement) by conciliation and arbitration of threatened, impending and probable industrial disputes. It may be that the

constitutional power ...enables the Parliament to legislate for the prevention by conciliation and arbitration of industrial disputes which fall short of being threatened, impending or probable disputes.'

'The ordinary paper dispute (ie that arising from rejection or failure to accede to the demands of a log of claims served by a national union of employees upon a national organisation of

employers) serves to identify both the existence of a subject matter appropriate to attract the exercise of arbitration powers and the parties to actual or potential disputes. Otherwise, it is not apparent to me that it serves any essential constitutional purpose. If the Constitution means what it says when it confers a broad power to make laws with respect to conciliation and arbitration for the prevention of interstate industrial disputes in

the abstract, it is far from evident either that there is any constitutional need to make the manufacture of an interstate dispute, whether paper or real, a condition of the existence of jurisdiction conferred pursuant to that grant of legislative power or that it would not suffice for constitutional purposes if e.g.,

the grant of jurisdiction to an expert tribunal such as the

72 INQUIRY INTO THE MEAT INDUSTRY

Commission were merely conditioned upon the opinion of the tribunal that circumstances exist in which the tribunal's conciliation or arbitration procedures may be conducive to the prevention of interstate industrial disputes. In that regard, it is difficult to see why section 51 (xxxv) of the Constitution, with its equal

emphasis on prevention and settlement, is not sufficiently wide and flexible to take account of the close interaction and interdependence of almost all industrial relations between employees and employers in modern Australia by reason of, among other things, the ease of communications and the dominance of national organisations or confederations of employees and employers either in a particular industry or industries or generally.'

In our respectful submission, if it were challenged, the High Court would be likely to uphold the making of an award in the terms we suggest, provided that the Commission is persuaded to make the appropriate finding of dispute.

The Commission may consider, given the widespread operation of the award as proposed, that it should, before making the award, direct the giving of public notice of such intention in a similar manner to that prescribed by Regulation 16 of the Industrial Relations Regulations 1988, whilst recognising, however, that this is not an application for a

declaration of a common rule under section 141 of the Act."(83)

MATFA also submitted that the Commission should prescribe that agreements between industry parties on wages and conditions which were not certified under s.115 of the Act would not be enforceable at common law. That submission was directed particularly at the Victorian situation, where the Federation contended that industrial duress had led to agreements enshrining various inefficient work practices which would lead to the industry's eventual demise in that State. It was made in the context of the suggested adoption of a set of principles by the Commission for the ratification of s.115 agreements:

"(4) There is a need to dismantle or reform the existing system of Victorian common law agreements which are in the process of destroying the industry.

In relation to item (4) above, we note that the Union submission (transcript pp.903-909) encourages the Commission to establish principles for the approval of current Victorian agreements. As noted elsewhere, those agreements have been extracted principally by industrial action,

they enshrine a host of inefficient work practices and impositions on the industry, such as the perpetuation of the two-for-one rate for boning, penalties being compounded in tally rates, excessive payments for inverted mutton dressing, restrictions on the performance of high tally, excessive superannuation payments and payment out of long service leave

after five years. The industry cannot survive in Victoria under those conditions.

The needs mentioned above can, in our submission, be addressed by the Commission adopting the following principles:

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INQUIRY INTO THE MEAT INDUSTRY 73

(1) By the Commission prescribing in each Division of the award, other than Division I, that after a certain period of time after the commencement of the award (we suggest six months) any agreement for any payments or other conditions not contained in the award would be unenforceable at common law unless certified by the Commission under section 115 of the Act. It is submitted that it is within the power of the Commission to make such a prescription by award, in order to negate undesirable conditions of employment in the same way that it has the power to prescribe rates of pay and conditions of employment that it considers appropriate. It would follow that

an employer and the Union could still enter into such unregistered agreements, but both parties would run the risk that they could not be sued upon, and could be discontinued at any time.

(2) That the Commission would not certify any agreement unless it complied with the requirements embodied in section 115 of the Act, especially sub-section (7).

(3) That if an employer chose to step outside the system of the award and certified agreements that we propose, that employer could expect no assistance from the Commission by the imposition of bans

clauses for dispute resolution, and the union could expect no assistance in other matters, such as dismissals etc.

(4) That the Commission will not be prepared to certify the existing Victorian agreements.

(5) That the Commission will not certify any agreement under section 115 where the Commission forms the opinion that it has been brought about as a result of industrial action or otherwise does not conform with the Commission's principles on enterprise agreements."(84)

The "Timework adjustment payment" proposed by the Federation as a

transitional overaward allowance with the establishment of a minimum rates award was also suggested as appropriate for s.115 agreements:

"(9) We have already noted that the Commission could not prescribe such payments by award. It would not normally certify agreements for such large over-award payments not based on increased productivity. Indeed, productivity may initially fall for a short period. We believe that the Commission should, however, countenance certified

agreements under section 115 of the Act to provide a level of Timework Adjustment Payments designed to reflect existing rates of pay in a particular plant.

(a) The unusually high rates of pay actually being paid in the industry as a result of the tally systems;

(b) The unique situation brought about by such a major structural change;

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74
INQUIRY INTO THE MEAT INDUSTRY

(c) That it could only occur upon a change from piecework

to timework, and would be recognised as such by the label - Timework Adjustment Payment.

(d) A recognition that realistically, rates cannot be significantly reduced;

(e) The ability of the Commission to confine a particular level of over-award payment rates to a particular plant (by virtue of section 115 (7) of the Industrial Relations Act);

(f) The Commission being able to exercise the necessary degree of control and supervision. It should do this by laying down strict guidelines for the certification of such agreements, and by providing in the award (as we have already submitted to the Commission) that any

over-award arrangements not certified by the Commission would be unenforceable at common law. The TAP scheme would then only be enforceable if it were certified under section 115.

(10) In order to overcome the situation of the union refusing to enter into the necessary agreement, we submit that the Commission should clearly state that if agreement cannot be reached within the above parameters, or whatever parameters are set by the Commission, the award rates of pay will apply."(85)

Whilst the thrust of submissions of the Angliss Group of Companies was for the removal of restrictive practices which currently plague the industry and which limit production and foment disputation, the issue of s.115 agreements was not specifically addressed.

The NFF considered that the history of the meat industry (or more particularly the abattoir/processing sector of the industry) was marked both by a heavy reliance on the Commission to solve problems which it believed were capable of resolution by discussion between management and employees at the workplace, and by a heavy influence of both MATFA and the AMIEU at plant level. It proposed that the Commission should consequently prescribe minimum conditions for the industry in a "core" award, with enterprise bargaining providing actual rates and conditions appropriate to the particular circumstances of individual plants:

"The Commission should then, in our opinion, step back and allow the

industry to set a new course in which the Commission makes clear its services are available but, in future will expect that the participants, employers and employee will do a great deal more than they have done in the past to ensure that they solve their own problems.

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INQUIRY INTO THE MEAT INDUSTRY 75

The sort of award structure that we advocate is entirely consistent with this type of approach. It envisages close relations between management and the workforce in establishing the terms of regulation for the particular enterprise.

This industry is notable for the lack of any really significant efforts at discussion between management and labour. If, for no other reason, other than to start such a dialogue our proposal on the award situation should be upheld.

It is abstract and academic in the extreme to believe you can do anything serious about industrial relations without people talking together about their mutual problems at work.

This Commission needs therefore to state that as a major part of its program of improved industrial relations in this industry, it expects that management and workers will be coming up with working arrangements

that suit them, their plant and their locality. The IRC should make it clearly understood that it will ratify such agreements, and will give every assistance to those groups of managers and employees who are trying to overcome the industrial culture of this industry and do something positive.

It may well mean that neither MATFA nor AMIEU are directly involved, and of course this Commission has previously decided in this industry to permit such arrangements in the NT Meat Processing Industry Award (see Appendix 3). The results of such discussions could be formalised by way of either s.112 or s.115 of the Act or by way of Common Law."(86)

The NFF summarised its vision of industrial regulation of the industry in these terms:

"From the foregoing, the Commission will see that while we do not want to be parties to a system that subjects its employees to substandard treatment, what we do want to see and achieve is that, given the

establishment of National Minimum standards, then as much variation and flexibility as possible, with the greatest differences between plants as possible as to permit competition for labour to ensure that the best labour receives, what is for them the best deal."(87)

The Commonwealth Government advocated a single 'umbrella type' award for the industry with the opportunity for management and employees to enter into plant-level agreements (or group agreements covering a number of plants) which recognised the variations which occur within it:

"In line with recent developments in the wage-fixing system and the increased focus being placed on the development of working arrangements to suit enterprise specific conditions, the Commonwealth sees merit in the new award framework for the industry, allowing sufficient flexibility

for enterprises to determine a number of working arrangements, including payment systems, ie piece rate, or time based, or a combination of the two. _______________________________________________________________________________

(86)NFF written submissions, pp.12, 13 (87)ibid., p.34

76 INQUIRY INTO THE MEAT INDUSTRY

The award framework would of course still provide a safety net in terms of setting minimum award rates of pay, and would also have to include changes to hiring arrangements, establishment of new classification structures which facilitate multi-skilling and career

paths, and the introduction of new and flexible working arrangements.

The current wage fixing principles already allow some scope for enhancing enterprise flexibility through the introduction of enterprise flexibility clauses, or facilitative provisions into awards. Both these options allow for agreements, particularly on working patterns and

arrangements to be negotiated at enterprise level, and are intended to allow individual enterprises to apply their respective awards in a way that meets their own particular circumstances.

Any agreements reached through enterprise flexibility clauses which require award variation need to be ratified or registered with the Commission."(88)

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INQUIRY INTO THE MEAT INDUSTRY 77

The ACTU advocated the retention of the Seniority system which applies throughout the processing sector. That system was a further feature of employment which had its origins in the lack of employment stability in the industry. Whilst improved transport systems, the development of feedlots, plant rationalisation etc. had reduced seasonality and periodic plant closures to an extent interruptions to production remained a characteristic of the industry.

Such interruptions and fluctuations in production led to the stand-down or termination of meatworkers, and the operation of the Seniority system protected the employment opportunities of experienced workers over time.

The ACTU noted that the absence of employment security in the processing

sector had also influenced other employment characteristics, for example:

• the incidence of daily hire and associated
  

10% loading;

• union involvement in the make-up of teams (influencing numbers 
        employed and wages earned);
  

• restrictions on overtime in some areas to enable more regular 
        employment;
  

• insistence on
  

maximum tally production in other areas to ensure adequate remuneration;

• the use of rostered days off
  

where available through plant-level 38 hour week-agreements to accommodate production troughs (Victoria);

MATFA provided the inquiry with documentation detailing a representative sample of the different seniority systems which occur throughout the industry

(MATFA 10 pp.11-45). Differences in award prescriptions (as distinct from plant agreements) are also recorded at MATFA 22(b) pp.54-63. It noted that while such systems varied in many ways, all provided rules for the engagement, promotion and retrenchment of employees.

The Federation submitted that the nature of Seniority prescriptions and agreements, based solely on length of service, severely inhibited efficiency in the industry. The systems:

• discourage skills acquisition and provide a barrier to
  

classification restructure and career development based on skills;

• limit flexibility in the use of personnel
  

across different functional areas of plants;

• militates against the retention of competent, enthusiastic
  

young recruits; and

• engenders a complacent attitude in the workforce.
  

78 INQUIRY INTO THE MEAT INDUSTRY

MATFA advocated the removal of seniority provisions from awards:

"Seniority simply cannot survive the restructuring of classifications in this industry, based, as they must be, on the acquisition of skills, and not on length of service."(89)

The Angliss Group submitted that the Seniority system was unduly

restrictive in the efficient use of personnel on meatworks. It did not advocate the removal of the system however, rather it proposed that the system should be based on the acquisition of skills, and not length of service. It submitted that more interesting and satisfying jobs would be created as a result.

The NFF submitted that Seniority provisions throughout the industry were unduly restrictive and were too narrowly based inasmuch as they applied generally to service within a particular department of a meatworks and not to service to the industry as a whole. The NFF noted that the systems militated against training and skills development in the industry.

The Commonwealth, whilst noting that daily hire and seniority systems applied within the industry, did not specifically address this issue. In its broader submissions however it advocated the establishment of a career structure within the industry with movement between classifications within that

structure based on skills acquisition and training.

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(8) ADDITIONAL PAYMENTS (INCENTIVE PAYMENTS TO FOLLOW-ON LABOUR)

The ACTU submitted that the situation which currently applies in the processing sector in Queensland where non-piecework labour receives an incentive payment of 31 1/4% should be formalised by award prescription. The Council noted that a variation to the QMIA to this effect had been sought and had been the subject of preliminary proceedings before the Commission. That application is one of the matters referred to this inquiry.

In Exhibit D53 the Council tendered documentation including transcript excerpts and a decision of the Commission relating to this issue. Briefly put, that material establishes the history of the matter in Queensland meatworks, where:

• agreement to pay a 31 1/4%
  

loading to "follow on" labour was achieved around 1971;

• that agreement was extended further to encompass
  

timework employees at each meatworks in 1982; and

• whilst since 1983 all respondents to the QMIA had been
  

effecting such payments the matter had not been the subject of an application to vary that award at that time as no agreement had been reached to enshrine the arrangements in the award. A Union application to do

so had been referred to a Full Bench at the behest of MATFA (C No. 27091 of 1989).

Given particularly the length of time the payment has been an employment condition in Queensland the Council proposed it should now become an award prescription both in that State and generally across the industry:

"Those are just various matters that have been before the Commission

already relating to this issue, Commissioner, and, clearly, in any event, that's before this inquiry and it's a matter that we've heard reference to in the course of our inspections. We've seen the issue of the payment on all of the meatworks inspected and we've also seen reference to the fact that this payment was sought in terms of the South Australian industry with agreement eventually reached for a different type of payment to follow-on labourers being reached and currently applying in South Australia.

We submit that for those reasons that were set out and advanced by the union in the transcript of 11 January 1990 these provisions should now be made part - both of the QMIA and relevant awards in terms of the Queensland industry, but also, we seek it specifically in terms of the federal meat industry award that we are seeking."(90)

MATFA presented the inquiry with a great deal of witness evidence concerning the operation of the 31 1/4% loading to non-piecework labour in Queensland. The Federation also noted that various over-award payments are made

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80 INQUIRY INTO THE MEAT INDUSTRY

to such employees in other States covered by Federal Awards, and tendered an exhibit summarising those payments (Exhibit MATFA 79). As noted in that exhibit, the 31 1/4% is the subject of award prescription in three Queensland awards:

• F.J. Walker Queensland Meatworks Industrial Agreement
  

• Award, 1976(91)

• Queensland Meatworks (Metro Meat (Peterborough) Ltd and Others) 
        Award
  

1984(92)

• Thomas Borthwicks Queensland Meatworks Industrial Agreement/Award 
        1982(93)
  

The prescription in those awards was by agreement between the parties. Where employers have objected to award variation to reflect the practice, no arbitrated application by the Union has been successful.

A summary of the operation of over award payments and anomalies and difficulties associated with them are contained in MATFA's final submissions (MATFA 113 Vol. 1) at pp.94-95.

The Federation argued that the existence of the 31 1/4% loading both by award prescription and overaward payment in Queensland did not justify its extension to other parts of Australia, and that in any event such action would be contrary to wage fixation principles:

"The evidence reveals that in many places, time workers are paid a variety of over-award payments, the most notable being the 31.25% in Queensland. We have already submitted that the Commission cannot, consistent with its principles, prescribe such payments in the award. If tally work is to continue, and an employer were to decide to continue working to a tally

system, we submit in Part C.5 of this submission that the piece work scheme should be confined solely to those functions already performed under piece work under the existing schemes, and should not extend to time workers, whether follow-on labourers or not. We have also submitted (Part B.12), that any over-award payments should be unenforceable at common law unless contained in an agreement certified by the Commission pursuant to section 115 of the Act. We submit that that principle should also apply to over award payments of this nature, although the Commission might, in the circumstances, consider it appropriate to indicate that it would be prepared to certify such agreements which merely give effect to existing arrangements where a tally system continues to be worked, provided that that over-award payment were reduced to an actual dollar amount as at the date of the award, and provided that it reflected an appropriate discount from existing daily hire rates if weekly hire is awarded. If the Commission were to take that course, it should specify that such over-award payments should absorb future increases in award rates and increases derived by promotion to a higher classification,

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(91)Print D0809 [F013] (92)Print F6786 [Q009] (93)Print F4047 [T146] (94)Exhibit MATFA 113, p.298

INQUIRY INTO THE MEAT INDUSTRY 81

The Angliss Group noted that the 31 1/4% loading to non-piecework labour, whilst a feature of employment at the Company's Queensland plants, did not apply to its operations in other States. In Exhibit S.2 (p.27) the Company tendered (inter alia) a copy of a decision of Mr Commissioner Caesar relating to reduction in labour with the application of the loading to the boning room of its Rockhampton plant. The principles established by that decision were used in negotiations for labour reduction in return for the loading elsewhere in the Company's operations.

In respect of other Angliss plants the Company noted:

"Once the principle was then established that there had to be reductions in labour to achieve this payment, the matter was negotiated through the other departments.

When the issue was discussed at the Company's Riverstone plant the employees made a decision that jobs would not be sacrificed for extra payments. So that principle has stood and the 31 1/4% incentive payment does not apply across the board at our Riverstone plant.

The situation at our Naracoorte plant is similar in that the incentive payment does not apply there, apart from the Beef Slaughtermen, Boners and Slicers."(95)

"For this Commission to accept the Union's claim for this matter to be set as an Industry standard would be a total injustice to those plants who are not participating in the practice and totally contrary to the earlier mentioned decision."(96)

Neither the National Farmers Federation, the Commonwealth Government nor the Victorian Government addressed this specific issue in their submissions.

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82 INQUIRY INTO THE MEAT INDUSTRY

The ACTU noted that the processing sector of the industry was marked by high levels of turnover and absenteeism, and that those characteristics had been highlighted during the inspection phase of the inquiry.

The Council tendered (Exhibit D32) a report of the Automative Industry Council on costs and causes of labour turnover and absenteeism in the

Australian automobile industry, published in August 1990. It asserted that factors revealed in that report were common to the meat industry:

"We tender this exhibit, Commissioner, because we believe that the factors that have been identified in the automative industry also reflects the state of, in many ways, the state of the meat industry that we found in the course of our inspections and that those same issues need to be addressed properly if we are to have an efficient and modern meat industry in this country."(97)

Issues discussed in the report which were highlighted by the ACTU included:

• that the key factor influencing turnover, absenteeism and 
        motivation was employee organisational commitment;
  

• that an important determinant of organisational commitment was the 
        adoption of an open management style
  

including:

. fair decision making processes, . communication to the workforce of plans and decisions,

. consultation with the workforce, . involvement of employees in planning processes, and

. adoption of ideas and suggestions of employees;

• that motivation was as important as skill in increasing
  

• that integrated solutions were needed to combat turnover and 
        absenteeism;
  

and

• that the first step in the process should be a change in management 
        style towards more open, communicative
  

and consultative practices.

MATFA submitted that labour turnover and absenteeism was a significant source of inefficiency in the processing sector of the industry. The Federation drew upon turnover statistics provided to the inquiry during the inspection

program to illustrate the point. Those statistics are summarised in Exhibit MATFA 70, pp.8-10, and reveal turnover rates as high as 91% at one plant visited (Metro Meats, Noarlunga). Whilst turnover at five of the plants visited was 3.5% or less, the Federation described figures across the industry generally as "exceedingly high".

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INQUIRY INTO THE MEAT INDUSTRY 83

The Federation also provided the inquiry with the results of a survey of its members concerning absenteeism. Such details were tabled in Exhibit MATFA 93 (Annexure D) and are summarised as follows in that Annexure:

"Cases of extremely high levels of absenteeism mainly occurred in larger rather than smaller meatworks. The national average in the meat industry for absenteeism in 1990 was 6.13 man days lost per employee. Around 10 days lost per employee was the highest level at a particular plant recorded during 1990. The national average in 1989 was 5.76 days lost per employee, the difference being diminutive between the two years.

Levels of absenteeism within the meat industry have remained fairly constant over the three years covered by the survey, with each worker averaging a total of about a weeks work in absences in each year.

Sixty percent of meatworks with more than 300 AMIEU employees had absenteeism figures above the national average. For example, one of the

largest employers, R J Gilbertson Pty Ltd at Altona North, recorded an average of 9.46 man days lost per employee over the past three years for its plants. Thomas Borthwick's Mackay plant averaged 7.4 days lost per employee.

In comparison Thomas Borthwick (Pacific) Ltd was well below the national meat industry average at 4.013 days lost per employee."(98)

MATFA submitted that such levels of turnover and absenteeism were symptomatic of the negative 'culture' which pervades the industry, that their costs were high, and that their reasons were complex. It referred the inquiry to a report by MacQuarie Consulting Pty Ltd commissioned by the Federation:

"The cost to the industry in losing skilled operators and the consequent extra training costs are high. Every effort should be made to redress this situation by both management and unions.

The cause of a high labour turnover is obviously a complex issue. However, there are a number of significant contributing factors namely:

. the difficulties of attracting quality labour due to the poor

image of the industry, the seasonality of employment and resultant job uncertainty.

. the nature of the work involved and the often unpleasant operating environment.

.
the mass production system which has as a key assumption the simplification of tasks through a division and redivision of labour to break each task into its smallest element. By making each job relatively easy to learn there is the flexibility through replacement of workers with limited skills and experience rather than the cultivation of multi-skilled workers.

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84 INQUIRY INTO THE MEAT INDUSTRY

Under the current system workers have narrow responsibility and input which results in a lack of motivation and restrictive attitudes to

productivity improvement. Further productivity restrictions arise due to management tending to treat workers as a cost to be controlled, rather than as an asset to be developed."(99)

The submissions of the Angliss Group of Companies did not address this issue.

Neither the National Farmers Federation nor the Victorian Government addressed this specific issue in their submissions.

The Commonwealth Government noted that high absenteeism and turnover rates were a feature of employment in the processing sector of the industry. It submitted that the repetitive and unpleasant nature of the work, often uncomfortable and relatively unsafe working environment and the lack of employment security associated with daily hire practices all contributed to this feature. It proposed that production process alternatives should be

"However, we would like the industry to look at whether there are alternative ways of working. The approach taken is highly Taylorist, and the principles of Taylorism are now being questioned in regard to their impact on workers and the efficiencies they provide. Other industries which are dominated by repetitive process work are looking at alternatives, e.g., TCF and vehicles, and this industry might consider the same.