Factory shut down as Turnbull refuses to rule out revisiting individual contracts

The shutdown of a Campbell’s Soups factory in regional Victoria over flexible working arrangements has raised questions over the operation of the Rudd Government’s new IR laws, as Opposition leader Malcolm Turnbull refused to rule out re-introducing individual workplace agreements if he wins power.

Turnbull says he will review the performance of the Rudd Government’s new Fair Work industrial relations regime, which came into effect on 1 July, but is concerned that the new laws have reduced flexibility for employers.

“Labor claims they will not reduce flexibility in the workplace. We believe they will. But we will review the performance of those changes and then we will, in light of that, make whatever policy recommendations we think are appropriate,” Turnbull said after the NSW Liberal conference held on the weekend.

Crucially, he refused to rule out re-introducing individual workplace agreements, which were introduced under the Howard Government’s Work Choices regime.

Labor Senator Mark Arbib launched an attack that is expected to continue in Parliament over the next few days.

“It’s pretty clear that Malcolm Turnbull was pretending last November, and now the real Liberal policy has been revealed.”

However, Turbull’s claims about the inflexibility of the Fair Work regime have been given some weight by an industrial dispute at Campbell’s Soups’ factory in the regional Victorian town of Shepparton.

According to a report in the Australian Financial Review, the Campbell’s plant was shutdown at midnight on Friday and will not open until an agreement with the Australian Manufacturing Workers Union is complete.

The company has offered workers a new agreement with two annual pay rises of 4%, followed by an increase of 3.8% of nine months.

But the dispute centres around the use of “flexibility clauses” in the agreement. The Rudd Government introduced the “flexibility clauses” to allow employers more flexibility to come to agreements with staff on issues such as slight changes to working hours.

Industrial relations lawyer Peter Vitale from CCI Lawyers says flexibility clauses are required to be part of every bargaining agreement and must no leave an employee worse off. If the union and employer cannot agree on the working of the clause, the Fair Work Act sets out a default clause that can be used.

However, Vitale says the clauses are an area of concerns to unions, as the employee is unable to have a flexibility agreement approved by a third party such as union. Some unions feel these clauses may give employers a way of doing individual deals with workers.

“That’s one fundamental objection that the unions have,” Vitale says. “I think there is definite concern about the flexibility clauses from unions.”

Vitale says that while it is difficult to speculate about the exact details of the Campbell’s dispute, the fact that factory has been shutdown over the issue should give employers “a taste of the new bargaining processes”.