Industrial Dispute At SPC Ardmona In Australia: Causes And Implications

SPC Ardmona is a giant fruit processing organization located in Goulburn Valley in Victoria is at the helm of fruit processing industry being the major cannery food processor in Australia. The company faced a financial crisis which threatened its operations which led to eventual closure and massive loss of jobs nearly 2000 workers affected. In 2005, the fate of the company was revived courtesy of huge investment by its parent company Coca-cola Amatil. The company owns brands including Goulburn Valley, IXL, SPC, Ardmona, and Taylors.

The term dispute means disagreement or difference over a range of issues in the workplace, between employers themselves or employers versus employees. Industrial disputes are often initiated when the interest of all or the majority of the employees is at stake by factors related to either employment or non-employment factors and conditions of service of a person (Giudice, 2014, pp. 433-441). The SPC Ardmona reveals that industrial dispute is ripe to begin when the interest of the workers is at stake a contribution of the Federal government or the direct employer. This entails job security of the employees being in jeopardy, threats and unwarranted dismissal, termination or slash in employees’ salaries and wages.

The industrial disputes are classified into two parts; interested dispute and right disputes.

These disputes are also defined as the economic disputes. They arise from changes made on the terms and conditions of employment that most definitely perceived as not favoring the workers or claims made by the employees (Fair Work Commission, 2014).

This dispute arises out of the interpretation of the existing contract. Further classification of industrial disputes indicates two categories namely economic and non-economic factors. The later will entail issues relating to compensation like wages, bonus, allowances, working hours and conditions for work, retrenchment and unjust retrenchments (Lewin, 2008). The non-economic factors will mostly include ill-treatment, victimization of employees, political factors, sympathetic strikes and indiscipline cases.

Workers will conduct industrial disputes in different ways to ensure effectively, and communication is made to the parties involved in the dispute. Among the most effective ways are highlighted below.

Picketing is a form of strike used to request the workers to abort cooperation with the employer. The workers utilized display signs, banners and played cards to catch the attention of the public, so they are informed of the dispute and possibly sympathize with them (Saundry, Antcliff and Jones, 2008). Boycott, on the other hand, is complete withdrawal from duties and operations thereby paralyzing activities of an organization.

Definition of Dispute

The strike is the most vital form of dispute that entails automatic withdrawal of labor from production. In detail, a strike is the complete suspension or cessation of work by a group of people employees in the industry.

The SPC Ardmona dispute in Australia was occasioned by some factors that were rooted in the economic health of the giant fruit processing company (Fastenau, 1998, 103-126). The organization is one of a kind in the Australian market; it established unique terms and conditions of engagement under the Enterprise Bargaining Agreement that was perceived to be overly generous and costly to the company impacting on the organization's liquidity. Further, it was evidently a hurdle for the agreement to be benchmarked because the business was a monopoly in the country and therefore the absence of another business of comparison.

SPC Ardmona despite being a giant organization in Australia suffered a couple of problem that was threatening its operations, profits and development plans. Among its hurdles were the China cheap imports of processed fruits was the major threat to the company leading to the formal complaint raised to the Federal government of unfair import competition. Additionally, the company suffered a significant rise in the cost of production, excluding labor costs which was relatively minor. A substantial decrease in demand for the product contributed to the production costs since the lower demand both locally and externally dropped the economies of scale (Ross, 2014).

The fruit processing company faced taste and preferences challenges that were destined to a long-term decline in demand. The weather effects were also detrimental to the produce impacting on low export volumes of the product (Forsyth, 2012, pp. 476-494).

The fruit processing company faced taste and preferences challenges that were destined to a long-term decline in demand. The weather effects were also detrimental to the produce impacting on low export volumes of the product (Forsyth, 2012, pp. 476-494).

The company faced stiff competition from supermarkets and cheap imports of fruits from China which destabilized its profitability. This overly affected its cash flows and ultimately the ability of the organization to comfortably pay its workers their salaries and wages (Forsyth, 2012, pp. 476-494).

SPC Ardmona had made a workforce regulation agreement with its workers being the only company of that nature in the country. Termed as the enterprise bargaining agreement, it guided worker-employee agreement ensuring that issues and concerns in the course of engagement were resolved (Sappey, Maconachie and Teo, 1999, pp. 105-124). The company faced a massive job layoff because of its struggling nature and worse-still if the federal government could not come in to rescue the ordeal because of some issues in contention regarding the company deals with its workers (Creighton and Stewart, 2010).

Classifications of Industrial Dispute

SPC had secured a lucrative contract with the giant supermarket chain Woolworth with the huge investment in the business. Later, Woolworth decided to discontinue the massive contract and opted to source the processed fruit from other suppliers. This decision by Woolworth was a major blow to the fruit processing giants bringing economic devastation. In reaction to the unfolding events, the SPC Ardmona customers also negated the decision to source food off-shores and rooted for it to be sourced locally (Budd and Bhave, 2008). This essentially because of health and quality issues that offshore fruits posed to them and concern of possible joblessness that the decision could bring.

The federal government was not keen on reviving the dwindling fortunes of SPC because of several reasons they pointed out on their employee relations regulations.The government noted the company needed to restructure its worker's relations agreement to be tenable for it to give their financial support. The political class was equally reluctant and concluded that bailouts of companies in financial crisis could not be substituted to good managerial practices.

The parties involved in the disputes had a differing perspective of the industrial unrest. Below is the discussion from the three stakeholders perspective namely employer, the employees, and the federal government.

The federal government must ensure a smooth running of all the country's sector through availing the necessary resources, leadership, and resolution to issues arising. These responsibilities are nevertheless easy to fulfill because of various reasons including economic and political factors impacting on the society (Lewin, 2014). The federal government observed that SPC Ardmona had everything to do with their woes through effecting non-sustainable employee wages and salaries. It advised that companies should strike reasonable wage agreements with their unions that will not threaten their financial and operational health. It further noted that companies must take responsibility for their actions and the government was not ready to bail out the company from its troubles (Advisory, Conciliation and Arbitration Service, 2011).

The employer is the body that does recruitment and job placement of the workers considering their qualifications and experience. This body determines the salaries and wages of the employees and directly handle any issues affecting them in their duties (Paul and Rebecca, 2008, pp. 114). SPC leadership peddled a different narrative from what the productivity commission finding had propagated. They alleged the troubles of the giant fruit processor emanated from the unfair competition that involved fruits sold be overseas competitors at low prices. Further, the employer alleged environmental conditions like floods and drought negatively impacted on the productivity of its growers thereby translating into reduced volumes of input materials for processing. Additionally, the giant fruit processor company faced stiff competition from supermarket giants who had introduced brands that found the favor of the consumers (Daphne, 2008, pp. 124).

Interested Dispute

The employees and their union will fuel industrial dispute when they feel they have a matter that directly impacts on their welfare which is not handled effectively. Some of the factors are highlighted below

As a result of increasing cost of living, the workers will bargain for increment in their wages to cushion the rising cost of living and elevate their standards of living. Equally, the employees and their union will resist attempts by their employers to reduce their wages or retrench in a unprocedural way in financial difficulties (Latreille, 2013).

Retrenchment is the act of forceful lay-off of workers by a firm or company aimed at cutting down its payroll. This move is usually met with resistance from the victim and their colleagues which eventually produce industrial disputes (MacDermott and Riley, 2011, pp. 718-731). Personnel includes the capacity of the workers versus the workload. The workers will pick an issue with their employers when they have a huge workload without the human capacity to efficiently handle the work within timeliness. The Australian relations rules and legislation have been developed over time and designed to establish a balance between the interest of workers and employer.

The union of Australian workers intervened to save possible losses of the job by its workers which was occasioned by Woolworth decisions to source fruits from offshore. To that effect, the union engaged the Federal government and national parties to draft legislation to aid keep the Australian industry food alive (Fair Work Commission, 2013). Facts from economics tell that if a price of a certain product rises too fast above the market equilibrium, the demand for that product will fall. Equally, a sharp rise in wages will result in a reduced demand for labor increasing the rate and levels of joblessness. Additionally, the union actively championed for an establishment of proper and effective legislation of dealing with supplier including their payments and solving of disputes in eventuality to keep costs operations and partnership within tenable means (Whalen, 2008).

The federal government who had given the ailing company tough conditions and indicated they would not bailout SPC finally made a financial support to a tune of $22 million. Additionally, SPC Ardmona parent company also invested $78 million and came up with a rescue strategy to keep the company afloat. To reinforce its investment decision, the government also decided to offer the giant fruit processor tax refunds to improve its financial capability to run its operations and pay wages to its workers (Walker and Hamilton, 2011, pp 103-121).

Right Dispute

Efforts were also recorded from SPC Ardmona company. The organization worked harder to source ingredient from within its locality which was a strategy to promote the business of the growers and perform corporate social responsibility. Finally, in a bid to save their jobs, the maintenance workers conceded to a freeze of their wages (Budd, 2010)

The methods workers and their unions adopt to express their discontent in an industrial dispute are vital to achieving the results. This means both the workers and union need to be tactful to make their government and employer concede to their demands (Budd and Colvin, 2008 pp. 460-479). The workers through the leadership of their unions utilized the below methods to arrive at the result.

The union of Australian workers sought talks between the parties politicians and the federal government to intervene in the situation and save SPC from retrenching its staff. The politicians would, therefore, debate and force through legislation to put a massive investment to redeem the ailing company and therefore save the fate of thousands of workers (Department of Business, Innovation, and Skills, 2011).

The government played a tough conditional strategy that would see SPC Ardmona review its enterprise bargaining agreement to reflect sustainability and profitability in the business (Department of Employment and Workplace Relations, 2007). The government observed that the company was suffering woes occasioned by its managerial inefficiencies.

The employer cooperated to a large extend with the federal government and the union but also defended the situation of the company citing various reasons that led to its current situation.

Resolving the industrial dispute is vital to the stoppage of the process and returning operations to normal. A right and proper dispute resolution process focus on an effective resolution at the workplace level that will help to avoid the costs of resolving a claim externally; for instance, via arbitration before the Fair Work Commission, or through litigation in the Federal Court of Australia.A fair and win-win issue resolution inspires trust and confidence among the parties and settles the dust (Saundry and Wibbereley, 2014). Additionally, the road-map to the implementation of the agreement between the parties is of utmost importance. Further, an effective dispute resolution will help the employers and the federal government to uphold good and close working relationships and make the workers cooperative and productive on knowing that their grievances will be adequately examined and solutions put into action.

It was clear that SPC Ardmona as the subsidiary of Coca-cola needed a thorough overhaul of its systems to return to profitable ways. Coca-cola Amatil took over SPC Ardmona and on the onset initiated the re-negotiation of the bargaining agreement. This was to make the business tenable since the terms were overly generous and costly to the company. The existing provision and conditions in excess were condoning extremely generous redundancy and frequent cash outflows (Van and Dundon, 2012, pp. 97-121). The federal government finally honored the call by the company to bail it from the financial and operational crisis.

Forms of Industrial Dispute

In my opinion, this was an effective dispute resolution with a win-win situation. The federal government invested an amount to help SPC Ardmona company to revive and commence smooth operations. Courtesy of this action, the worker's job security was guaranteed, and there were no payments issues to the growers and other suppliers. The federal government ultimately saved its economy from plunging into problems with the increase of joblessness that could have been occasioned by massive job layoffs. Additionally, the federal government gained goodwill and positive reputation from the general public through the move to save the ailing company from total closure and possible windup of business. The Australian authority was equally perceived as active and responsible for intervening for the workers and helping the partners to reach an agreement.

Conclusion

The workers initiate industrial disputes, unions then gain the attention of their employers, government and the general public of their grievances. The workers and their unions will employ some tactics to ensure that their message is heard and force their employers into conceding their demands through strikes, boycott extra. Negotiation will see the parties arrive at an amicable solution; but in worst case scenario, the authorities will pick the matter to mediate and ensure that the verdict made is fair to both parties. Finally, it is within the legal rights of the workers to initiate industrial action and not to be victimized in the process.

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