Australian Abattoirs

Large processing facility operated by Teys with Cargill. Recently had a number of wage disputes. Has recently invesed heavily in new technology, currently operating 2 shifts processing 1,300 cattle per day

Current Operation

• Currently in operation as at 2015.

Location             

Owner                 

• Teys (1999)¹
  • own other plants at Rockhampton. Biloela and Naracoorte⁹
  • Has 6 plants in 3 states, Teys began operating in 1946, employ 5,000 people as at 2013¹⁰
• Abattoirs owned by Teys in Queensland
  • Beenleigh (QLD)
  • Rockhampton (QLD)
  • Biloela (QLD)
• Abattoirs owned by Teys in NSW
  • Tamworth (NSW)
  • Naracoorte (NSW)
  • Wagga (NSW)

Historical and current meatworks, canneries and abattoirs located in Australia can be viewed at;

Australian abattoirs inactive map

Operation          

• Export
• Nominal capacity 200,000hd as per 50 weeks(as at 1999)¹
• 800 staff²

History of the Beenleigh meat processing facility              

2010

• Partnership between Teys and Meat Livestock Australia (MLA) develop the semi automated ‘Beef Pullers’ – Collaborative Innovation Strategies (CIS) program²⁰
  • five units now installed by Teys and other processors²⁰
  • technology is designed to overcome some physical and OH & S challenges of the boning line²⁰
    • MLA don’t fund but provide support to assist to access commonwealth research grants 50:50 basis²⁰
• Beef Pullers – assist in removal of bones and knuckle – recognised as two most physically demanding tasks²⁰
  • Cost/benefit shown increased profit margin $3.50 – $4.65 per carcase²⁰
  • Pay back period 5 months or less.²⁰
• Beenleigh currently employs 800 workers.³⁷
  • Up to 50% of skilled staff mostly from Brazil and Vietnam.³⁷
  • Most workers are union members.³⁷
  • With a union representative in every department.³⁷
  • Joint consultative committee.³⁷
  • An EBA is currently in place.³⁷
    • skilled staff receive payments above the award.³⁷
    • slicers and boners recieve tally (piecework) payments.³⁷

2011

• July. CEO – Brad Teys “..it’s been about 30 years since he had seen the supply of cattle so tight”⁹
• producers not selling cattle due to poor prices and company forced to reduce kill days at Beenleigh to 3 days a week, Biloela 1 day, Rocky 3 days and Naracoorte was shut down temporarily⁹

2012

• March. Petition started to close abattoir due to dust and health risks from cattle yards¹¹
• June. Rockhampton – Lakes Creek abattoir Labour hire employees (mainly humanitarian entrants) are renumerated under a WorkChoices agreement that pays a flat rate of pay²⁶
  • without penalties for overtime or shift allowance²⁶
  • Previously the workers had been paid at enterprise agreement rates²⁶
  • AMIEU campaigned enterprise agreement be reinstated²⁶
    • AMIEU claim Teys no longer allowed access to facilities due to this incident²⁶
• August. Carbon tax said to impact in costs of $2M- unless takes drastic action to reduce its emissions – a plan that would involve a temporary shut down²
• Key competitors don’t face carbon tax³

2013

• February. Clean technology allocations – $2.83M, project $6M. Install 34ML covered anaerobic lagoon and basin to capture biogas for use on site. Reduce emissions by 85% saving $1.3M energy costs and $380,000 carbon price per year⁴
• March. AMIEU lodge an application for rights of entry order to the plant²⁶
  • Teys provided a room to which employees could see their representative if they wished²⁶
    • AMIEU claim room was too small, only able to hold 50 people, with sometimes 130 union members in attendance²⁶
    • EBA used the room when AMIEU made a protected action ballot to be conducted²⁶
    • AMIEU claim then due to the number of people Teys were unable to supply a room suitable²⁶
      • Oztrail outdoor gazebo with a table and 2 chairs. “It was located immediately adjacent to a truck marshalling area, with the attendant flies, stock manure and noise”²⁶
      • AMIEU made another application²⁶
        • allowed to use the lunchroom²⁶
• May. Workers Dispute.

Teys Australia CEO Brad Teys

“A number of companies that specialise in higher quality grain fed beef have been forced to close, merge or restructure over the past decade due to uncompetitive workplace arrangements”²

“We are dealing with a union stuck in the 70’s, that still believes in unfettered union power“²

• 24th May – 4 hour stoppage. AMIEU strike.⁵
• 24 hour strike by AMIEU for 31st May – 2nd in a week⁵
• Teys saying what AMIEU want
  • 50% leave loading⁵
  • penalty rates within ordinary hours⁵
  • forced payment for idle time⁵
  • increased Workers compensation benefits above that prescribed by legislation⁵
• Teys say – Many of staff are not union members, Only 28% of workforce voted in favour of strike⁵
• AMIEU say – 80% are members, 75% supported action of stopwork⁶
• What union say is happening at plant
  • Beenleigh operations made $38M in after tax profits, 9 years to 10/11, during same period paid $33M in dividends⁶
  • Teys want to cut wages by 20%, increase workload by 30%. Large part of workforce have lifted productivity by 18% since 1998, yet real wages declined by 11%⁶
• Tey’s are in process of negotiating new workplace agreement²
• Wages $40M each year²
• June. Processing in Australia costs $300 a beast, USA $150 Brazil $111⁷
• Boner in Australia earns $30/hr, in USA $12/hr¹⁰
• 2012/2013 study – International Labour Organisation rates countries per highest hourly wage in manufacturing¹⁰.
  1. Denmark
  2. Switzerland
  3. Australia
  • 11th USA
  • 17th New Zealand
  • 28th Brazil.
• Wage structures require more flexibility for seasonal harvesting, peak times in Agriculture which change employment demands and short term staff requirements¹⁰
• AMIEU spokesperson Matt Journeaux. said members oppose to cuts up to 18.3% of current earnings for 30.5% more work. For a slicer meant a loss of $8448/yr¹²
• Staff tell Teys CEO “they have had a gutful” of continued industrial action – Brad Teys – Teys CEO¹⁷
• Negotiations continue¹⁷

” The only way we will reach agreement is for the AMIEU to negotiate with an enterprise and productivity focus. They still don’t understand the need for change” – Brad Teys – Teys CEO¹⁷

• Teys Australia currently operate 6 plants in 3 states with 5,000 employees¹⁰

• July. AMIEU and employee representatives refused to allow a new wages and bonus offer be put to secret ballot to members¹³
  • Staff wanted performance bonuses removed, Teys did and replaced with 3% wage increase¹³
  • Cash bonus make up lost time during dispute¹³
• Negotiations on Enterprise bargaining agreement ended¹³
• Beenleigh plant operated on a 1% return on asset base for past 4 years¹³
  • failure to change could result in plant closure¹³
    • Closing was a last resort³⁶
  • Beenleigh had much higher operational costs than Biloela (QLD) or Rockhampton (Lakes Ck) (QLD)³⁶
• Teys considered closing the plant after eight months of negotiations²⁸
  • following 4 years of low returns²⁸
• 300 signatures of staff calling for a ballot, less than 50% voted for industrial action AMIEU rejected secret ballot forcing company (Teys) to terminate negotiations and explore options which included closure of plant¹⁴
• Teys put forward 5 proposals, all rejected by AMIEU and committee¹⁴
• Plant employs 800 staff, responsible for 4000 flow on local jobs and $250M into local economy¹⁴
• Oct. Fair Work Commission approve the Enterprise bargaining agreement passed in employee secret ballot, to commence October 4.Follow 10 month industrial dispute with AMIEU
  • “Victory of common sense and a final rejection of obstructionist union tactics” Tom Maguire (Teys’)¹⁵
  • “Its a real stunner that Australia’s 2nd largest meat processing company with net equity of over $200M and $2.19B in revenue wants to pay people below award rates and conditions” AMIEU¹⁵
• Teys’ offer unprecedented, a profit- sharing incentive for staff in EBA, is unique in meat processing and manufacture industry, 5-7% on top of normal earnings if reaches set profit targets.¹⁶
  • “company and its workforce has to work together to lift productivity in what is a highly competitive global meat processing environment”, “Manufacturing must reform to remain competitive”¹⁶ Tom Maquire (Teys’)
  • “From the outset, only a minority of workers wanted to take industrial action. Then a majority voted to approve the new EBA. Yet the union persisted to drag this out only to achieve was was agreed in the first place” Tom Maguire (Teys)¹⁸
  • AMIEU, QLD Industrial Officer Lee Norris – serious doubts Teys would deliver on its commitments¹⁶
• During Federal election in 2013 period – Beenleigh EBA came under national spotlight when opposition leader – Tony Abbott questioned by the Fair work commission would not endorse a workplace agreeement supported by most of the staff³¹

2014

• March.Currently processing 1,300 prime cattle per day¹⁹
  • Operating two shifts, one in afternoon and one in day.¹⁹
• Fair Work Commission (FWC) throw out the EBA following an appeal by AMIEU³⁰
  • EBA will now need to go back to FWC for approval³⁰
  • 500 employees will immediately have weekly pays cut $25-30³⁰
  • majority of employees on site will actually owe Teys up to $900 each³⁰
• Teys Australia – a Cargill Joint Venture have plants in QLD, NSW & SA¹⁹
• Fair work commission throw out Enterprise Bargaining Agreement (EBA) following appeal by AMIEU²¹
  • Conditions employed under since October 2013²¹
  • Employees voted in favor of EBA April 2013²¹
  • If EBA dismantled some 500 employees could have weekly pay packet reduced by $25-$30²¹
    • Majority of employees would find they owe company as much as $900 each²¹
  • AMIEU claim voting was “ballott rigged” Brian Crawford, AMIEU branch secretary²²
    • allowing trainee supervisors to vote.²²
  • Teys deny rigging²³
    • vote administered by Australian electoral commission not by Teys²³
    • Trainee supervisors been included in last 6 EBA’s since 2012²³
    • some trainee supervisors are union members²³
    • AMIEU have long been aware of inclusion of trainee supervisors²³
  • Types of reforms acheived in 2013 EBA vital for the survival of the meat processing company²³

  “We must continue to manage rising manufacturing costs or processing will go the way of the car industry and other manufacturers” Tom Macquire. Teys corporate affairs manager.²³

• Workplace relations inquiry submission by Teys, John Salter – General manager of workplace relations²⁶
  • Teys Australia is Australia’s second largest beef processor & exporter²⁶
    • annual turnover $3B²⁶
    • Operating in QLD, Vic, NSW & SA²⁶
      • 9 locations²⁶
  • Employs close to 4,500 people²⁶
    • often the largest employer in various regional centres²⁶
    • Annual payroll in excess of $350M²⁶
    • People costs represent 62% of operating expenses²⁶
  • Teys is party to 21 FWC approved Enterprise agreements²⁶
  • Beenleigh site agreement was reached with employees in 2013²⁶
    • approval has been mired by litigious complexity which the Fair Work Act of 2009 has exacerbated, rather than neutralised²⁶
    • Agreement subject to interlocutory stay of FWC full bench order²⁶
    • First EBA approval September 2013²⁶
      • FWC Deputy President at the time. Ingrid Asbury.³¹
    • First FWC full bench appeal – December 2013²⁶
    • Second EBA approval – April 2014²⁶
      • FWC Deputy President at the time. Ingrid Asbury³¹
    • Second FWC full bench appeal – September 2014²⁶
    • First Federal court hearing June 2015²⁶
    • Second Federal court hearing scheduled for May 2015²⁶
  • Beenleigh current operations two shift basis Monday – Friday²⁶
    • some employees on site 24/7²⁶
    • Employee figures fluctuate but some 24 periods 850 employees to meet production schedules²⁶
  • 2010 EBA had significant inflexibilities threatening the viability of the plant²⁶
    • operational and cost base challenges,²⁶
      • which other competitors (within Teys incl) don’t face²⁶
        • cost of environmental compliance due where plant is located in a heavily populated area²⁶
  • 2013 EBA allowed increased productivity²⁶
  • If forced to go back to 2010 EBA some job losses may occur as production costs are reassessed²⁶
  • Changes considered are:²⁶
    • lowering throughput of cattle to 1,200 head a day²⁶
    • Changing boning & load out departments to 5 day 8 hour roster²⁶ (40 hours)
      • currently working on a 4 day by 9.5 hour roster²⁶ (38 hours)
      • 5×8 roster could result in 20% redundancies²⁶
        • 40 permanent staff in load out and boning rooms²⁶
        • 3-4 in the cleaning²⁶
        • others in salary staff, management and supervisory areas²⁶
    • 2010 EBA doesn’t accomodate taking of annual leave but is featured in the 2013 EBA²⁶
      • if annual close down resumes under 2010 EBA reduction in 5% staff to cover for annual leave if had been taken in 2013 EBA²⁶
      • these staff would now be surplus to requirements under 2010 EBA²⁶
    • Teys invested $20M in the 2014/2015 year²⁶.
      • this increased job creation²⁶
    • Payroll system CHRIS in a retro perspective to accomodate reversion to payment of skilled workers would cost $500,000 to implement²⁶
• July. Teys currently employ 4,500 people in QLD, NSW and SA.²⁴
• Workers at the Beenleigh plant had voted to approve a work place agreement in 2013 but AMIEU had obstructed the deal and mounted continuous appeals.²⁴

“..the business environment in Australia, especially industrial relations, was not conducive to manufacturing, and the sector could not compete internationally” Tom Maquire²⁴

• Teys say reform of the labour arrangements, greater market access and a reduction in costs and charges on companies were key ares that needed to be pursued by the government.²⁴

“We must remove the ability by third parties – namely unions – to interfere with the relationships companies have with employees, allowing them to hold up and counter legitimate agreements” Tom Maquire²⁴

• Federal Government must tackle industrial relations reform or risk the closure of more manufacturing industries³³
• New EBA – Teys Australia will include productivity-based profit sharing³⁴
  • as well as annual wage increases³⁴
  • Is an industry first inititive
  • Bonus cheque $2000 – $6000³⁴
  • AMIEU oppose the the bonus³⁴
• September. Profit sharing bonus’s were paid this week²⁵
  • represents pay-out of about $1.2M²⁵
  • Paid the bonus’s inspite of union opposition and will not be asking workers for a refund²⁵

2015

• February. Federal Court ruled that controversial enterprise agreement approved by workers in 2013 was invalid²⁷
• 35 jobs created under the new EBA³⁵
  • jobs are now directly threatened³⁵
• An independent economic report estimated the Beenleigh plant flow effects;³⁵
  • contributes more than $360M in GDP to Brisbane region³⁵
  • underpins more than 1800 full time equivalent jobs³⁵
• Teys Australia Beenleigh Ltd v’s AMIEU 2015
  • News article cites 600 workers to affected²⁷
  • AMIEU claim 300 workers will have ‘fatter’ pay packets²⁷
    • argued a ballot to pass the EBA included people who were ineligible to vote²⁷
  • Federal court rule that company must return to 2010 agreement²⁷
    • Higher skilled workers are paid more²⁷
      • boners, slicers & slaughtermen²⁷
        • payment is based on weight of cattle processed²⁷
      • lower skilled workers would be worse off²⁷
        • lower skilled will have a lighter workload²⁷
    • 2013 agreement was to pay on hourly rate irrespective of how many animals processed²⁷
    • AMIEU claimed Teys told workers they wanted a 20% increase in productivity without increasing pay²⁷
      • Teys deny claim²⁷
        • Tom Maquire – said the company can’t compete with overseas rivals unless it cuts labour costs and increases productivity²⁷
• Unions would now meet with Teys to negotiate new agreements.²⁷
• Decision in regards to the future of the Beenleigh plant was approaching³¹
  • Cattle herds were falling³¹
  • Tougher international competition from US and Brazil expected³¹
    • Australian Cost of Production (COP) $300 a head³¹
    • US & Brazil COP $165³¹
• August. EBA dispute has been ongoing since 2013³²
  • Federal Court ruled that Fair work commission had made a wrong decision to back the union, it was entitled to make wrong decisions³²
  • Means the 2014 EBA is now void³²
    • 500 workers wouldn’t receive bonus of $4,500.³²
    • Similar bonus’s in 2015 would also be lost³²
    • Scheduled wage increases for the next 2 years are gone³²
  • Now operation will be under the 2010 EBA where³²;
    • current hourly rate will decrease³²
    • every worker will be worse off by 12%³²
  • Teys were working on a new plan to secure rises and bonus’s³²

Sources

1. Competition & Exit in Meat Processing. Agribusiness review Vol 7 1999
2. ‘Gillard great carbon tax backdown – Off the Hook’ QLD Country Life 02.08.12
3. ‘Processors ‘beef’ with carbon tax’ Nth QLD Register 06.9.12
4. ‘Teys, T & R latest round of carbon abatement grants’ Beef Central 18.02.13
5. ‘Teys wants union to ‘get real’ and negotiate to protect 800 jobs’ Beef Central 31.05.13
6. ‘On the brink: Teys warns “reform, or more jobs will be lost’ Beef Central 31.05.13
7. ‘Teys hold talks with AMIEU, as workers call for close to dispute’ Beef Central 12.06.13
8. ‘Manufacturing on the brink’ Teys Media Release 29.05.13.
9. ‘Cattle supply chokes’ NT Country hour. 14.07.11
10. ‘Food processing labours under high wages’ ABC rural 07.06.13
11. ‘Shut down Teys Beenleigh’ Petition. http://www.activism.com
12. ‘Strike action taken by workers at Teys Bros abattoir in Beenleigh over wages’ Courier mail. 04.06.13
13. ‘Teys: 800 jobs at risk as union rejects wages offer’ Beef Central 12.07.13
14. ‘Teys’ Beenleigh workers petition directly for secret Ballot’ Beef Central. 22.07.13
15. ‘Warning to Government and unions to enter “New age of Industrial relations” 09.10.13
16. ‘Beenleigh profit sharing incentives blazes trail for meat industry EBA’s’ Beef Central 09.10.13
17. ‘Teys: Workers want end to ongoing industrial dispute’ QLD Country life 13.06.2013
18. ‘End to Teys dispute in sight’ Nth QLD Register 03.10.2013
19. Job advertisement for 2 workers. Teys. 03.03.2014
20. ‘Research partnership delivers new commercial technologies’ Feedback. March 2010
21. 800 Beenleigh workers face pay cuts under AMIEU action. Beef Central. 07.03.2014
22. ‘Union tells Teys to put-up or shut-up’. Beef Central 11.03.2014
23. ‘Teys rejects union claim of EBA vote-rigging’. Beef Central 12.03.2014
24. ‘Teys:Govt must take action’ Nth QLD Register 10.07.2014
25. ‘Industrial relations: Beenleigh staff paid ‘ground breaking’ profit share cash bonuses’ Beef Central 04.09.2014
26. AMIEU ‘The National Meatworker’ August 2013
27. ‘Ruling finds controversial enterprise agreement approved by workers in 2013 was invalid’ The Courier-mail 12.02.2015
    • Teys Australia Beenleigh Pty Ltd v’s AMIEU 2015
28. ‘Teys Clashes with union over enterprise dispute’ The Bulletin 06.08.2015
29. sub0095-workplace-relations
30. ‘Fight over Teys EBA continues’ www.Farmonline.com.au. 07.03.2014
31. ‘Teys looks at closing abattoirs’ www.farmonline.com.au 17.02.2015
32. ‘IR system fails 800 Beenleigh meatworkers, says Teys’ Beefcentral 03.08.2015
33. ‘Teys calls for greater IR reform’ www.farmonline.com.au 08.07.2014
34. ‘Teys says AMIEU opposes its employee bonus plan’ Beef Central 25.07.2014
35. ‘IR system “needs urgent overhaul” as court……” Beef Central 13.02.2015
36. ‘Workers safe at Rockhampton and Biloela’s abattoirs’ The Morning Bulletin 14.07.2013
37. Work-skills-and-training-2301-1