Union Avoidance Strategies in the meat processing/packing industry in Australia and the USA Compared

Transcription

1 Union Avoidance Strategies in the meat processing/packing industry in Australia and the USA Compared Marjorie A. Jerrard (Monash University) and Patrick O Leary (Federation University Australia) 1 Introduction In Australia, the meat processing industry, like its American counterpart, the meatpacking industry, is not generally known for cordial relations between management and trade unions. 2 Instead, management has traditionally chosen an adversarial approach underpinned by inter-firm solidarity through membership of peak employer associations, although companies do sometimes break ranks from the employer association in an attempt to gain competitive advantage and increase market share. 3 Over the last three decades, there have been several examples of companies choosing to do this in various ways, usually in order to avoid the influence of the industry trade union, the Australasian Meat Industry Employees Union (AMIEU), thereby showing variability and adaptability in their union resistance strategies. These management strategies to restrict trade union influence or avoid the respective union altogether are shaped by several factors, including geographic location of the abattoir or plant, the availability of an alternative workforce, the regulatory environment for industrial relations, industry competition, the availability of animals for processing, and management ideology. However, meat processing industry employers may make strategic decisions that are not driven by union presence but which subsequently affect the union s members by weakening the influence of the union. This paper uses a series of vignettes and case studies to illustrate the interactions of such factors and highlights the growing similarities as Australian strategies converge with 1

2 American strategies. It also draws on the extensive research by John Logan 4 to identify the strategies adopted by employers that are common to both Australian and the US industries. It examines the contextual factors in which the meat industry operates in each country to identify and explain similarities and differences, including the influence of neo-liberalism and business principles on employer strategies, 5 and outcomes of employment policies centred on migrants 6 and race. 7 John Logan and the literature on union avoidance strategies in the US John Logan s research on forty years of union avoidance in the US has identified a number of employer strategies, including those in the meatpacking industry. A number of these have also been tailored for use by employers in the Australian meat processing industry. In the US, union avoidance law firms worked with consultants rather than with management. 8 In Australia, consultants and law firms work directly with company management. In the US, consultants representatives manufacture dissent and divisiveness within the workplace, blaming the union for the hostile environment. The consultants may also advise management to engage in illegal actions to counter the union, including targeting union members for dismissal, because penalties for such actions, if proven, were not severe. According to Logan, consultants also tutor management and supervisors on how to engage in unlawful activities such as surveillance, interrogation, and threats of dismissal without fear of facing unfair labour charges. 9 American consultants plan and orchestrate every aspect of management-initiated industrial action, opening negotiations with a demand for drastic cuts in existing wages, benefits or working conditions 10 to which the union cannot agree or, if it does, it will lose its 2

3 members. However, only in the US do employers, policy makers and (to a lesser extent) the general public consider the activities of union avoidance experts a legitimate part of mainstream industrial relations. 11 In the US, the use and threatened use of permanent replacement workers during industrial unrest has been an employer s weapon since the 1930s. The replacement of a unionised workforce after a plant closure became an employer strategy in the meat industry in the 1980s and remains an option. The Australian union avoidance literature Rae Cooper and Greg Patmore reviewed Australian labour research and identified five key anti-union employer strategies, including union busting and avoidance; paternalism and welfarism; the establishment of company or in-house unions and the use of sweetheart deals with non-militant unions; developing non-union forms of employee representation; and employers combining into associations or federations to counter worker organisation. 12 Specific tactics identified included the dismissal and harassment of union activists and members; relocation of operations; anti-union publicity campaigns in the workplace and community; the use of a range of sophisticated human resource management techniques to quell the desire for unionisation; and a range of union substitution activities such as employee involvement schemes and the promotion of inhouse unions as well as surveillance, of union members and activists. 13 Many of these in various combinations are apparent in the Australian case studies and vignettes presented to illustrate the range of meat processing employer tactics adopted since the 1990s. These strategies identified by Cooper and Patmore also reflect those identified by Rae Cooper and Bradon Ellem as used by employers in four industries - the waterfront, 3

4 the civil service, higher education and construction 14 Bruce Hearn McKinnon in mining 15, and those identified by David Peetz more generally. Peetz identified a range of decollectivist strategies that were adopted by Australian employers in industries such as mining and telecommunications but which can also be identified in the meat processing industry, including rational exclusivist strategies such as delaying or refusing to negotiate with a union, restricting or refusing entry to union organisers, restricting or preventing union delegates from undertaking their delegate duties, locking out the workforce, using legal action against the union and its members, and also violence against union members. 16 Peetz s informational exclusivist strategies included threats of plant closure and layoffs, threats to dismiss employees who joined the union, and anti-union messages to the workforce. 17 Peetz identified that the strategies each had a real dimension to the outputs from decollectivist strategies that is, employment practices initiated at the workplace, the relational behaviours of management towards trade unions, and the informational behaviours of management and a symbolic dimension that is, exclusivist, dual inclusivist/exclusivist, and inclusivist. Various combinations of strategies could be adopted by an employer at any given time and the outcomes could vary. An industry overview: Australia and the United States In Australia, the meat industry is referred to as the meat processing industry, usually referring to the domestic-market industry, or as the meat processing and exporting industry, referring to the export-licensed section of the industry. These definitions are drawn from the red meat industry which covers all work carried out in an abattoir, from 4

5 the slaughtering (beef, veal and lamb) through to the packaging of the meat for export or domestic consumption, and also including the manufacture of smallgoods. The pattern of ownership of the Australian industry remains split between the largely foreign-owned beef export industry and the Australian-owned domestic beef and lamb processing industry. To begin with, Australian-based pastoralists owned and developed the Australian industry in its formative years. The pattern changed to British ownership with the move of companies such as Borthwicks and Vesteys into the industry at the turn of the twentieth century. The American-owned Swifts followed and soon established operations. The other main player was the Australian company, William Angliss. The foreign-owned companies operated for six to seven decades before withdrawing; export ownership again returning briefly to Australian control. During the 1980s, Japanese business interests began investing in vertical integration in the industry grazing, feedlots, and abattoirs. Then in the 1990s, the American-owned ConAgra Holdings (Australia), itself a subsidiary of the American owned ConAgra group which then became owned by the American food company Swift & Co, became the parent company of Australia Meat Holdings (AMH). During the 1990s, AMH, the Australian-owned Consolidated Meat Group (CMG), and the Japanese-owned Nippon Meat Packers became the dominant industry players. Smaller but influential companies included G & K O Connor and Teys Bros (now Teys Australia). Since then, ownership has again changed with largest player in Australian meat processing now the Brazilian-owned company JBS Australia, a division of JBS, which took over AMH s operations in 2007 after taking over the American-owned Swift & Co. JBS now employs approximately 8000 people across Australia. Nippon Meat Packers still remains influential and, in 2002, Teys Bros entered 5

6 into a joint venture with CMG taking over the latter s operations. Since then, Teys has entered a partnership with the American privately owned Cargill and now operates six abattoirs across the eastern seaboard, employing about four thousand people. With the consolidation of ownership in the hands of fewer companies, there remain seventy-two licensed export abattoirs and two licensed domestic abattoirs operating in 2014 but approximately fifty smaller abattoirs have ceased operating since the 1970s, the majority of these in regional towns across Australia. In the USA, the red meat industry is divided into two sub-categories: meat-packing, which is defined as the industry that slaughters and processes animals for meat (, and meat-processing, which is the industry that takes in the basic materials [produced from meat-packing] (either by purchase or by internal transfer) and produce[s] further processed products. 18 American meat industry ownership patterns are in some ways similar to those in Australia with the early twentieth century industry dominated by five large companies: Armour, Swift, Morris, Wilson, and Cudahy. Over time, ownership changed hands and by the 1980s, there were some foreign entrants such as the Japanese-owned Nippon Meat Packers. However, foreign ownership remained relatively confined until the Brazilian family-owned company JBS SA took over Swift & Co in 2007 and Smithfield in 2008, making this company the largest American-based meat processor. There has been some interest shown by South Korean and Chinese companies but the industry remains dominated by only a small number of major companies including JBS and Tyson Foods Inc which purchased Iowa Beef Processors (IBP) in 2001 and is the largest exporter of beef. JBS and Tyson have approximately 45% each of sales in beef products. 19 The other 6

7 two major operators are Cargill Meat Solutions and the National Beef Packing Corp. As with the Australian industry, the much larger American industry saw plant rationalisation and closures. However, in the USA, abattoirs were relocated to rural and regional areas, largely in the Mid-West and the surrounding States, and away from capital cities. The industry is now based in States such as Minnesota, Iowa, South Dakota, Michigan, Nebraska, Kansas, Illinois, Wisconsin, Colorado, Indiana, and Texas which has served a dual purpose of moving away from union strongholds and also reducing the standards of wages and conditions on offer. 20 It can reasonably be stated that the industry in both Australia and the US remains oligopolistic with the majority of ownership and marketshare controlled by a few major companies, particularly in the US. 21 The advantage of this for the employers is that direct competitors can relatively easily copy these labour management strategies because of the scale of operations and the ability to finance new strategies, whether they be geographic relocations or the use of a flexible migrant workforce. Using the Australian legal framework to support new strategic initiatives by the Australian employers In the mid-1990s, the Australian Federal Coalition Government, as Peetz wrote, sought to create one of the industrialized world s most favourable environments for decollectivist strategies through a combination of legislative and administrative arrangements. 22 The Workplace Relations Act 1996 provided employers with two forms of non-union agreements, individual Australian Workplace Agreements (AWAs) and collective non-union s170lk agreements as well as the unionised s170lj agreements. Under s170mh, a company could terminate an enterprise agreement and return to the 7

8 industry award, usually in order to reduce the wages costs under the enterprise agreement. A common employer tactic in the meat processing industry, facilitated by s170mh, was to utilise seasonal plant closures to shut an abattoir and then reopen with standardised conditions and wages lower than the previous ones and with a selectively hired workforce in which union activists would not be offered new contracts. For Peetz, this tactic was part of an exclusivist employment practices strategy aimed at decollectivism by utilising retrenchments and layoffs, dismissal of union members, and dismissal of union activists to further undermine the job security of those unionised employees remaining. 23 An example of exclusivist employment practices combined primarily with a relational exclusivist strategy was found at G & K O Connor at Pakenham, Victoria where the company, from , engaged in an industrial campaign against the AMIEU as it attempted to move from an enterprise agreement back to an industry award and then to low-wage AWAs as part of a union avoidance strategy. This latter tactic reflected the American approach identified by Logan adopted whereby employers opened negotiations with an offer cutting existing wages and changing working conditions which, if the union accepted, members would be dissatisfied and leave, so the only option open to the union was to refuse the offer and support its members in industrial action. 24 G & K O Connor used a multiple-pronged approach to union avoidance, refusing to negotiate with the AMIEU for a new collective agreement in the first instance (relational exclusivism), then locking out its unionised workforce and using a law firm specialising in union avoidance and industrial dispute litigation (relational exclusivist and reflective of American employers use of law firms), then hiring a replacement workforce made up 8

9 largely of migrant workers and refugees who were employed as trainees on AWAs as a condition of employment (dual inclusivist/exclusivist strategy), and finally using a specialist consultant Bruce Townsend - who advised management and supervisors on how to successfully engage in activities such as surveillance, victimisation and intimidation of the thirty remaining union members and delegates at the abattoir, and employee interrogation across the workforce (relational exclusivism in that these tactics could be viewed as violence ). 25 Another way of interpreting this G & K O Connor strategy was as union suppression, defined originally by Roy, then Gall, and later Dundon, as blatant intimidation of workers in order to instil fear in the workforce that is, fear stuff - combined with a refusal by the employer to bargain for a collective agreement termed a form of fatal stuff by the above authors 26 or by Peetz as a relational exclusivist strategy. 27 Alternatively, the targeting of union members could be interpreted as part of the consultant s role to assist management and supervisors to learn how to engage in unlawful fear tactics without fear of facing unfair labour charges. 28 A three and a half month lockout was also used by Conroys Port Pirie Abattoir in South Australia in an attempt to force its employees to sign AWAs that would introduce major changes to work practices, most notably the removal of the tally system 29 which gave throughput control to the workers as they could use the tally to control the pace of the chain. 30 Labour hire employees replaced the 11 locked out workers, while Conroys management reported that time work replaced the tally. Throughput increased considerably from the pre-lockout figures 31 after Peerless Holding utilised a lockout of its 30 unionised process workers employed at its rendering plant at Laverton, Victoria, in 2000, in an attempt to force them to sign AWAs that introduced rotating shifts, reduced 9

10 weekly pay rates, and reduced holiday pay rates. Labour hire replacements were brought in to keep the plant operational during the lockout period. The company and the AMIEU had a long history of adversarial industrial relations and, in this case, the company had resisted AMIEU and the Australian Industrial Relations Commission (AIRC) efforts to resolve the dispute 32 but the company s coercive behaviour with regard to the AWAs was found not illegal under the Workplace Relations Act. The behaviour of these companies reflected the American approach of management-initiated industrial action that was aimed at weakening the union s position, supported by blaming the union for the hostile environment. 33 In 2002, the Ramsey Group operated South Grafton Abattoir in New South Wales, had offered 121 unionised meat workers AWAs at lower pay than the current certified agreement and State award. When the Office of the Employment Advocate found these individual agreements to be in-breach of the no-disadvantage test, the AIRC terminated them on application from the AMIEU. The employer then attempted to remove union activists and members from its workforce, using the traditional temporary plant closure and rehiring strategy, alleging that a stock shortage forced the closure and that the employees could therefore be dismissed without normal redundancy payments. There had been ongoing delays over bargaining for a new certified agreement which were combined with management s attacks on AMIEU officials. 34 This is reflective of relational exclusivism and is also an example of the fatal stuff employers used to weaken the union position with a view to removing the union altogether. It further reflects the American approach of refusing to bargain and then slowing down the bargaining process 10

11 while creating a hostile environment and blaming the union and then targeting union members and delegates. 35 After the temporary closure, South Grafton Abattoir management dismissed 12 workers who were also active union members that is, troublesome employees, as they were referred to in court and refused to rehire them or pay out their entitlements. It was clear that this was a deliberate attack on the AMIEU and this was supported by the unfortunate vituperative employer comments about the union and its officials. 36 The employer, ideologically opposed to the union, was quoted in the Federal Court as saying: No need for you blokes to be members [of the union]. You don t want a Union official telling us what to do and making it impossible to function and... every single abattoir closure was under that Union. 37 This indicates the use of Peetz s informational exclusivist strategy, otherwise identified by Roy, Gall and Dundon as fear stuff where employees are intimidated into not joining the union for fear of management reprisals, in this case, job losses due to plant closures. It also reflects the American approach of creating a hostile environment and blaming the union and its members. Quoting from the Federal Court hearing, it is obvious that the employer was the purveyor of anti-union messages that the AMIEU would be destructive to the abattoir s performance: There can be no doubt that Mr Ramsey [the employer] at this time harboured considerable hostility towards Mr Davis [the union Organiser] and the role Mr Davis and the Union had played in the industrial arrangements between the employer group of companies and the abattoir 11

12 workforce. This hostility emerged expressly in the context of a discussion between Mr Ramsey and the workforce about the approach which should influence the upcoming arrangements in October. In part, this hostility was expressed to be a legacy of the earlier experience of the employer companies in facing Union opposition to the approval of the AWAs and the costs burden of that opposition. Nevertheless, there can be no doubt that Mr Ramsey at this time was hostile to the engagement by the Union in the industrial relations between the employer entities and the employees. 38 Federal Court Judge, Andrew Greenwood, found that the employer s attitude toward the AMIEU was crucial in driving the actions of Mr Stuart Ramsey with regard to the union and its members: Participation by the AMIEU in negotiating the structural employment arrangements at the abattoir, participation by employees in the Union as a member or delegate, the expression of dissatisfaction with the content of the conditions of employment, and steps taken to bring Australian Workplace Agreements to an end, all represented positions taken by particular employees that threatened Mr Ramsey s perceived criticality of the conditions and arrangements he preferred. 39 The employer lost the case on the grounds that it had discriminated against the 12 union members and breached the pre-reform freedom of association provisions of the Workplace Relations Act. 12

13 In 2006, CMG used the strategy of moving back to an industry award at its Lakes Creek Abattoir in Rockhampton, Queensland in order to cut its 1300 workers wages in a union agreement by thirty percent to remain competitive in the tightening beef export market. 40 CMG also attempted to draw up new rosters that included night time and Saturday shifts without penalty rates and which exceeded the 38 hour weekly award cap. The unionised workers voted to return to work only on genuine award conditions and not the new proposals the company had put forward. CMG used a human resource management approach of attempting to tailor working conditions and wages to the needs of the company during an industry downturn supported with tribunal appearances rather than pursuing industrial action and litigation in the first instance. Another strategy trialled by the Blue Ribbon meatworks at Launceston, Tasmania, in 2003, was that of forcing employees to become independent contractors and shifting employee-associated costs from the company to the individual worker. 41 Blue Ribbon utilised the services of a labour hire company, Newemploy, to employ the abattoir s workforce. Newemploy advised the abattoir s workforce of 53 that employment would be terminated an exclusivist employment practice - and that the workers would need to reapply for jobs as independent contractors. Thirty workers signed the contracts, 23 did not and were dismissed. Seventeen of these workers then picketed for 182 days outside the Blue Ribbon meatworks from which they were locked out. The State tribunal found that Newemploy contracting arrangements at the abattoir were not genuine independent contractor arrangements but were a sham, designed for the purpose of defeating the jurisdiction of [the] Commission and that Newemploy was in fact created as part of an overall business plan to cushion Blue Ribbon Products from the consequences of the 13

14 employment practices at the meatworks. 42 After Blue Ribbon and Newemploy unsuccessfully appealing to the Tasmanian Supreme Court, Blue Ribbon was ordered to pay the 17 workers back pay dated to their dismissal and Newemploy went into receivership. The relationship between these two companies was symbiotic in that it appeared that Newemploy was a company listed solely to provide contract workers for Blue Ribbon and both companies shared a director and major shareholder. 43 It is worth noting that Ramsey Food Processing the owner of the South Grafton Abattoir also attempted to use a similar arrangement with a new company called Tempus Holding Ltd Pty which was to be the employer of the Ramsey Group s meat workers in The Federal Court in 2011 found that there were overlapping shareholdings and directorships between Tempus and the Ramsey Group s companies but that the positioning of Tempus between the South Grafton Abattoir s employees and the Ramsey Group of companies did not transfer the legal and practical obligations of the employer to Tempus. The arrangement was ineffective if its purpose was to transfer obligations and it was found to be a sham. 44 The Workplace Relations Amendment (WorkChoices) Act 2005 (WorkChoices Act) further opened the way for a raft of new management advisory and consultancy services for employers to access, including the Employer Support Pty Ltd developed AWA Creator software; Melbourne-based Industrial Labour Solutions (ILS) promoting that it could use the new industrial relations laws to permanently offer employers solutions to dealing with industrial relations issues such as unions, enterprise agreements, unfair dismissals, permanent workforces, and redundancies through the use of independent contractors; and the push by labour hire agencies such as Organised Personnel Placement 14

15 (Aust) Pty Ltd promoting the benefits of a casual workforce over a permanent full time one. 45 Employment consultants such as Troubleshooters Available, which now provides contract labour for the building industry but in the early 1990s, offered its services to the meat processing industry, 46 and KSK Contractors which specialises in union busting tactics and workforce replacement across a range of industries were amongst the first such companies established. Australian consultant and founder of KSK Contractors, Bruce Townsend, publicly admitted on the television program, Sunday, in 2001 to having undertaken more than 200 jobs for employers, of which the beef exporter, G & K O Connor, was just one. 47 Of course, there had already been such services in operation in Australia prior to the mid-2000s and a long history of management attempts at decollectivisation of the Australian workplace, as Cooper and Patmore highlighted. 48 The Australian public and, to a lesser extent, policy-makers, do not consider union avoidance consultants as a legitimate part of mainstream industrial relations, unlike in the US where these experts are considered normal. In 2006, the then new WorkChoices Act encouraged Australian employers to legitimately utilise individual agreements to by-pass trade unions without fear of breaching freedom of association provisions, as had occurred in the 1998 Waterfront Dispute under the previous Act, to terminate employment, and to reduce labour costs by rehiring at a lower remuneration rate achieved through abolishing penalty rates, overtime pay, weekend work penalty rates, shift penalty rates, and public holiday penalty rates. WorkChoices s793(4) weakened the legal protections for employees who had been dismissed under the previous Workplace Relations Act allowing jobs to be terminated and alternative lower paid jobs offered for economic reasons. Meat industry employers were amongst the first 15

16 to move towards this strategy, albeit without the aid of the new consultants and their services. The small New South Wales Cowra abattoir moved to reduce its workforce of 29 down to 20 by utilising an operational requirements exemption under s793(4) of the new Act to reduce labour costs and facilitate its proposed restructure to combine pig and cattle slaughtering in the one operation. The company notified the unionised employees by letter on 30 March 2006, just three days after WorkChoices became operational, that they were receiving five weeks notice of termination but that 20 would be rehired on AWAs albeit at lower pay rates pig slaughterers would receive $560 per week instead of their then current average of $750 per week under a New South Wales enterprise agreement while beef workers who were earning between $750-$800 per week under the New South Wales State Butchers Award would also receive $560 per week. The redundancy payout for the remaining nine workers would be the New South Wales standard of 16 weeks for workers under 45 and 20 for those over 45. While the strategy was legitimate within the Act, 49 the Cowra management subsequently backtracked and did not proceed with its plans, probably due to the negative media coverage at the time that both the abattoir and the Federal Government were receiving. 50 The move to an alternative workforce in the Australian industry Teys Bros (now Teys Australia) operated six plants across Australia, including four in Queensland, employing 2300 people and generating $850 million per annum in export earnings in the mid-2000s. Management of the Teys Bros abattoir at Naracoorte in South Australia had attempted to force workers onto AWAs in early 2006 by locking out 20 employees, members of the AMIEU, who had refused to sign AWAs that reduced their pay and conditions. These local workers were replaced by 28 migrant visa workers for 16

17 the period of the lockout. Larger numbers of migrant workers, including 200 experienced meat workers from Brazil, had previously been brought in to work at the South Australian plant on temporary visas in 2005 in an attempt to weaken the union presence at the abattoir while filling skill gaps in the abattoir. The choice of Brazilian workers, however, did not contribute to decollectivism because some of these workers actually joined the AMIEU due to familiarity with trade unions in their own country. Teys Bros used a similar strategy at its Rockhampton plant in 2006 when foreign workers were brought from the Ukraine, China and Vietnam to fill a skills shortage, especially in the boning room. 51 In this case, the offered objective had nothing to do with avoiding the union but as many of the migrant workers were not familiar with the role of trade unions in representing workers and protecting employment rights, there was less likelihood of these workers joining the AMIEU. Sometimes strategies not developed with reference to decollectivisation actually contribute to weakening the union presence. In 2006, Teys Bros also utilised migrant workers on 457 visas at its Queensland plants at Biloela and Beenleigh. A labour hire company, AWX Pty Ltd, rather than Teys Bros, actually employed the migrant workers at the Rockhampton abattoir on an agreement developed under WorkChoices. The labour hire company agreement meant that the workers were employed as casuals and paid a flat rate of pay that was $2 less an hour than permanent Teys Bros employees. 52 This gave rise to a two-tiered workforce at the abattoir which was discriminatory against the foreign workers but which reduced labour costs. In 2013, the company moved these workers from the old agreement to the Meat Industry Award 2010 at the behest of the AMIEU and they received penalty rates for overtime and work on public holidays, shift allowances, and other benefits which they 17

18 had not previously received. 53 Teys Bros has plans for negotiating a new agreement with the AMIEU that will cover these workers as well as those already covered under the Teys Bros agreement. Teys Bros had relied on an initial ad hoc approach at Naracoorte using personal contacts to provide meatworkers from Brazil with management handling the migration process. This laid the foundations for an internal and integrated approach that by-passed external agents used by other companies and allowed Teys to move from the initial one year visas offered to the Brazilian workers to four year visas at both the Naracoorte and the Rockhampton abattoirs. This had the benefit of providing a stable and skilled workforce. Taking control of the recruitment and selection process for migrant workers also meant that Teys Bros had a greater chance of avoiding costs associated with poor candidate selection for the visa program and retaining greater management and supervisor-control over the new workforce. This use of HRM techniques fits into Peetz;s relational strategy and has a symbolic dual inclusivist/exclusivist dimension. G & K O Connor had effectively pioneered the use of migrant and refugee workers in the industry after the nine-month lockout of AMIEU members in The company had made a decision to extend its migrant worker recruitment, begun in 2000 during the lockout, and turn to migrant workers and also trainees to supply the majority of its permanent workforce. 54 Evidence from the USA showed that migrant workers in the meat industry are difficult to unionise and that the employment of such workers can serve as an effective union avoidance strategy. 55 This new workforce was akin to the permanent replacement workforces that American employers used, albeit in opposition to strikes, in a range of industries. It also reflected a pattern common to the Australian meat processing 18

19 industry whereby after seasonal closures, employers would rehire different workers in an attempt to weaken the union s influence. 56 It was part of the company s planned strategy to achieve the objective of not having any long-term employees in the company, an objective according to Kevin O Connor, achieved by April 2001 when he stated that long term employees really no longer exist in this company. 57 As with the G & K O Connor approach, Teys Bros offered support services to assist the new workforce to settle into their new communities. Education and training in English language and in safety were offered. The HR department offered complementary training for Teys Bros managers and supervisors in areas such as cultural transition, expatriate performance coaching and interpersonal and leadership skills, with a view to smoothing the transition process for all employees and managers. 58 The additional advantage for both G & K O Connor and Teys Bros was the State and Federal Government recognition both companies received for their training programs for migrant and refugee workers and also the financial support received for hiring trainees. However, for Teys Bros, the strategy did not avoid the union, as the Queensland Branch of the AMIEU successfully responded with multi-lingual recruitment materials distributed to potential members when officials visited current members working at Teys Bros. The union also appointed a Brazilian national who had been employed on a 457 visa as a slaughter to work as an Organiser focusing on the needs of migrant meatworkers with limited English language skills but also on assisting Australian members if required. 59 International recruitment programs are influenced by a range of inter-related factors; for example, the high Australian dollar negatively affected meat exports, thereby 19

20 necessitating a downsizing of the workforce from mid-2009 and halted the hiring of new migrant workers as Teys Bros attempted to retain as many of its then domestic and international workers as possible. Hiring began again in 2012 as beef demand again increased and it focused on refugees as the recruitment target. Other companies utilising migrant workers on slaughterers visas during 2006 and beyond included Australia Meat Holdings Ltd (AMH) in Queensland, the Nippon Group of Companies at their Queensland plants at Oakey and the former Thomas Borthwicks (Australasia) Pty Ltd. in Mackay, Kilcoy Pastoral Company Pty Ltd in Queensland, Tatiara Meat Company Pty Ltd in Bordertown, South Australia, Luturn Pty Ltd in Wakefield, South Australia, P & M Quality Small Goods Pty Ltd at Scone in New South Wales, Wagstaff Cranbourne Pty Ltd in Victoria, Tabro Meat Pty Ltd at Wonthaggi, Victoria, Pyramid Hill Pty Ltd, Victoria, and Ashton Pty Ltd at Swan Hill, Victoria. However, there was some doubt about whether these companies were employing the visa workers as slaughterers or in other capacities such as boning and slicing, jobs not covered by the visas, in order to reduce labour costs. Between December 2005 and January 2006, T & R Pastoral abattoir at Murray Bridge in South Australia had imported approximately 200 temporary Chinese workers in lieu of hiring local workers in an area where there was relatively high unemployment in order to reduce the labour costs associated with a local unionised workforce. 60 In this case, the shortage was not one of skill but of labour as the unemployed in the local community were not prepared to work for the low wages and under the poor conditions. 61 By the mid-2000s, the strategy was being adopted by companies other than T & R Pastoral, including Luturn, Wagstaff, Pyramid Hill, Kilcoy Pastoral, and Western 20

21 Exporters Pty Ltd, to meet shortfalls in unskilled and semi-skilled due to low wages and poor working conditions and to avoid having to offer better wages and conditions to AMIEU members under an award or enterprise agreement. The temporary migrant workforces for the majority of these companies were recruited through migrant recruitment agencies both in Australia and abroad who charged the workers either a spotter fee or a placement fee for finding them jobs in Australia. This fee was deducted from the workers wages, which in some Australian States, was illegal. While some employers definitely abuse the 457 visa scheme in the meat processing industry, using migrant workers in capacities that are not skilled in order to minimise wages costs associated with a unionised workforce, there is not the opportunity to utilise large scale undocumented migrant workforces in the same way as some American employers. 62 Relocating plants and using an alternative workforce in the USA During the mid-twentieth century, trade unions, such as the United Packing House Workers of America and the Amalgamated Meat Cutters Union negotiated wages and conditions in the industry and, from the 1930s to the 1970s, meatpacking pay and conditions improved considerably, placing meatpacking workers on higher wages than other manufacturing workers. 63 This was a situation similar to that in Australia where, between the later 1940s and 1980s, the industry was heavily unionised and meatworkers were amongst the highest paid blue collar workers. However, restructuring of the American industry began in the 1960s, with some slaughter plants relocated to rural States in the Mid-West and South, away from urban centres and union influence. Roger Horowitz, in explaining the strategy, focuses on a case study of IBP. 64 In 1967, IBP introduced boxed-beef, a new production and shipping system, involving 21

22 disassembling carcasses into retail-sized portions which were vacuum-packed at the plant. This was in direct contrast to the earlier shift from local to urban, industrial production as a result of the introduction of freezing technology to the rail system in the late nineteenth century. The rise of the trucking industry gave greater flexibility to plant location, allowing a move from urban to regional and rural locations once again. The move to boxed-beef allowed IBP to reduce shipping weights, retain useful meat byproducts for further processing, increase value-added production, and reduce the need for skilled retail outlet butchers. IBP reduced labour costs by requiring a non-union workforce, a strategy that was strengthened by acquisition of competitor meat packers in bankruptcy, such as Wilson Foods, and reopening them with non-unionised workforce. IBP also fought union demands during a series of strikes, such as the Dakota City Strike in 1977, and closed or sold unionised plants in Iowa while opening new non-union plants in Amarillo, Texas and Emporia, Kansas. 65 Carol Andreas also provided a study of the Montfort and ConAgra operations in Greeley, Colorado. 66 Consolidation of industry ownership between 1974 and 1997 saw the number of meatpacking plants fall from 1350 to 812 as larger companies bought out smaller competitors, closed these plants and either re-opened them with a non-unionised workforce or closed them permanently and opened new larger alternative slaughterhouses in rural areas. 67 These rural areas often had dwindling populations due to the closure of other established manufacturing but had the advantage of rail and road links to enable live animal, as well as end meat products transportation. Consequently, there was a local unemployed workforce ready to move into meatpacking jobs, including large numbers of women and, where there was a labour shortage, the companies could bring in labour, 22

23 often African Americans recruited from other States or migrants directly from Latin American countries, especially Mexico. 68 It became a common practice in a relatively short period of time less than three decades - to utilise a largely migrant workforce in the red meat industry and also in the poultry and hog slaughtering industries, especially as labour turnover was extremely high. 69 This workforce gave employers greater control, particularly over a largely unskilled workforce, due to the mechanisation of the industry from the 1970s. Migrant workers were both unfamiliar with American labour laws and lacked personal resources and community ties in their new towns. They were difficult for the United Food and Commercial Workers International Union (UFCW) to unionise, often not having a culture or understanding of unionisation, and also because of language barriers. If these workers were transient, as many were, there was little incentive to think of long-term socioeconomic advancement through unionisation. These rural areas were also outside of the union strong hold associated with the large capital cities. Migrant workers have fewer rights than US citizens and, therefore, employers can treat them differently, which was exacerbated if they were undocumented or unauthorised migrants because they have no rights and no mechanisms of complaint about poor and dangerous working conditions and low wages. 70 Undocumented workers were often brought into the US by people smugglers and, according to Champlin and Hake, there is also evidence emerging of organised crime participating in people transportation. 71 J. David Brown, Julie L. Hotchkiss & Myriam Quispe-Agnoli recently demonstrated that a workforce based largely on undocumented workers provided employers with increased competitive advantage in an industry where competitor firms followed this hiring strategy 23

24 and that the benefit increased with the labour intensity of the production process. 72 These characteristics describe the American meatpacking industry. For this hiring strategy to be successful, the authors identified three assumptions that must be met. The first assumption is that employers need to know or at least be able to guestimate that a worker is undocumented. Given that large numbers of such workers are drawn from Spanish speaking Latin American countries and have limited English language skills and lower education levels, an employer can, with a relatively large degree of certainty, make the hiring decision. 73 The second assumption is that the undocumented worker will have limited employment opportunities and will therefore accept a low paid job with poor conditions and will not make any official complaint about this treatment. 74 And the third assumption is that the expected benefit from employing an undocumented workforce exceeds the expected costs of breaking the law. If an employer is in a non-border State, the likelihood of investigations and fines is much reduced, and if the employer is considered large and has considerable market share, the financial costs of fines are considered minimal. 75 Champlin and Hake support this, by arguing that hiring unauthorized workers who are already inside the US is not regarded as a serious violation of immigration law. Moreover, employers who do so face no risk of sanctions, since the law only requires that documents presented not be obviously fraudulent. 76 For meatpacking companies, reputation as a good employer is not important, unlike for other companies in different industries, so even if a company is accused of employing undocumented workers and of mistreating them, the negative publicity has minimal impact and does not act as a deterrent. For example, on 12 December 2006, US Immigration and Customs Enforcement officials raided six Swift s meatpacking facilities 24

25 in Colorado, Nebraska, Texas, Utah, Iowa, and Minnesota, identifying and detaining 1282 undocumented immigrants from Mexico, Guatemala, Honduras, El Salvador, Peru, Laos, Sudan, and Ethiopia. 77 This was approximately ten percent of the workforce which the company had to replace and it was part of the biggest immigration raid in American history. 78 The company was not criminally penalised as a result of the raid but did change its hiring practices. The company utilised a recruitment firm to assist with identifying and removing undocumented workers from the workforce and to identify a suitable alternative workforce, largely drawn from political refugees from Burma and several African countries who had been living elsewhere in the US. 79 These most recent refugees allowed Swifts part of Con-Agra and then JBS from 2007 and other meat processors to continue to sustain working conditions not tolerable to many American-born workers, albeit with slightly higher wages than undocumented workers would tolerate. 80 Industrial strategies in the US: All tied up with a migrant workforce? With the majority of American meatpacking industry-ownership in the hands of a small number of companies as a result of a consolidation process and urban-rural geographic relocations of slaughterhouses, a push towards standardisation of mechanised production processes and reduced demand for skilled workers saw a power shift to the employers when it came to the employment relationship. The early 1990s saw IBP, Cargill and ConAgra as the key players but most of these companies were subsequently taken over by others JBS, Tyson, and the National Beef Packing Corp while Cargill continues as Cargill Meat Solutions. Meatpacking employers could control union elections waste time, delay elections, refuse to negotiate, threaten workers who wanted to join, distribute anti-union 25

26 propaganda, all strategies identified by John Logan as common to American employers. 81 Employers could push the UFCW into engaging in concessional bargaining, a tactic identified by Logan as a common employer strategy to weaken the trade union. 82 While concessional bargaining could keep an established plant open for slightly longer, it was not a successful long term strategy and urban slaughterhouses closed anyway with new plants re-opening with non-unionised workforces in rural areas. Throughout the 1980s and 1990s, the pattern of closures, reopenings, then usually permanent closure and relocation was followed across the industry. William Whittaker tracked a number of these, as did Charles Crypo, arriving at the conclusion that the strategy was both common and effective in de-unionising the workforce. 83 Apart from IBP, one of the key leaders in this anti-union behaviour the US meatpacking industry was the George A. Hormel company. Established in 1891, Hormel is a large US meatpacking and smallgoods company, with SPAM one of its most recognised brand. Hormel s international head office is in Austin in Minnesota s rural south-east, some 110 miles south of the Twin Cities (Minneapolis/St Paul). During the 1980s, Austin was essentially a single-industry town. Workers at the Austin plant had established a union in 1915 and the plant had a history of militant IWW-inspired unionism from the 1930s. 84 By the 1970s, Hormel had established other plants across the US, giving it significant labour market and product market control in hog-slaughtering at least. From then on, with the aim of generating major concessions from its unionised workforce, Hormel senior management began to use the general shifts underway in the industry, discussed above, to issue open threats that it would mothball its aging Austin plant and shift production to one of the right-to-work states. 85 The United Food and Service Workers 26

27 Union (UFCW), the organising union across the Hormel organisation, responded by, in exchange for a company promise to maintain employment in Austin by building a new plant there, accepting lower wages for Austin workers. Thus, in 1978, the union and workforce agreed to wage reductions to underwrite, through an escrow loan to the company, a new plant in Austin. Hormel opened this new, more efficient plant in While Hormel had one of the most efficient meatpacking plants in the US (the newly opened Austin plant discussed above), in 1984 senior management unilaterally reduced the size of its Austin workforce and cut wages and conditions by 23 per cent. 87 It also acted similarly at its other plants, playing off its employees in one plant against those in others for concessional bargaining outcomes. This strategy was common throughout the industry during this period and the UFCW leadership seemingly collaborated as a means of defending its position in the industry. When Local P-9 (at Austin) moved to resist the new round of concessions, the UFCW leadership effectively sided with management. By the end of 1984, six of the eight plants in the Hormel group had signed the new, lowwage contract, with the seventh signing in early Austin remained the only plant where employees actively resisted management s plans. 88 Hormel s unionists at Austin rejected the company offer and struck on 17 August Despite Local P-9 having set up a picket illegal under Minnesota state law Hormel reopened the plant with scab workers in January By the end of June 1986, the UFCW had disendorsed Local P-9 and re-established a union presence (Local 9) at the plant among the strikebreakers. Despite widespread support, most strikers lost their jobs and the plant returned to full operations, with the 23 per cent pay cut and other lost entitlements firmly in place. 89 While these legal, labour market and product market 27