Ovato seeks redundancy change as Covid bites

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Heatset print giant Ovato is asking the national industrial tribunal at the Fair Work Commision to end its current  agreement with its staff, as it battles revenue losses, which will lead to a redundancies.

Pre-Covid: Michael Hannan (l) and Kevin Slaven at the opening of the new Warwick Farm supersite

The move to change its enterprise agreement foreshadows a round of redundancies that the company will make in the near future, and is, it says, intended to enable the company to save as many jobs as it can.

However the proposal to terminate the existing agreement has put the company at odds with the AMWU, which has labelled the move "extreme action."

CEO Kevin Slaven says the move is aimed at negotiating more appropriate redundancy levels, and says there is no intention to reduce base wage rates. He said, "Like many businesses across the country, we have experienced a significant reduction in our revenue as a result of the Covid-19 pandemic – to give you an idea we are currently running at around 60 per cent of where we were pre-Covid. Jobkeeper and the recently announced extension has been of great assistance to us and our staff, but it doesn’t alter the fact we will need to adjust the size of our workforce to survive as a smaller business through this period.

"Our nominally expired EA is reflective of a prosperous past, not the current economic reality we face, and our current redundancy scales across all of our business need to better reflect this. We have already addressed this with our non-EA workforce, and are seeking a similar approach with the AMWU members.

"We have been very clear with our people and the AMWU. Our goal is to reshape our business to position ourselves to get through this challenging period, preserving as many jobs as possible. An essential part of that is being able to resize our business quickly, which the legacy conditions of our nominally expired EA currently make impossible.

"Any insinuation from the AMWU that we are looking to cut wages is simply wrong – we have categorically stated to the Union and delegates that we will not reduce base wage rates despite them being significantly above Award, our focus is on negotiating more appropriate redundancy scales so we can resize and save as many jobs as possible."

The AMWU is saying the company is asking the tribunal to end its current agreement so it can offer new deals, which it says will include a 30 per cent pay cut for 850 of ithe 1300 staff, as well as smaller redundancy payouts. The Union says terminating the agreement would force workers back onto the pay and conditions set out in the Graphic Arts Award, effectively cutting their entitlements.


AMWU assistant national secretary (Print and Packaging) Lorraine Cassin, said, “We are very disappointed that Ovato has chosen to take such extreme action against their workers when the workers have bent over backwards to accommodate the company.

“Workers have been constructively engaging with the company since negotiations started in October last year. When Covid-19 hit and company revenue dropped, workers were willing to reduce their working hours and take annual leave to keep the company going. This is a real breach of good faith." Many Ovato staff went on a 60 per cent hours and wages platform in March when Covid hit.

Ovato has the contract for Australia's biggest magazine publisher Bauer Media, which has seen a severe downturn in its printed pages since Covid slammed into the country, with magazines closed, shelved and suffering reduced pagination as advertising dollars have dried up.

Three weeks ago Bauer was bought by heatset operation Webstar NZ owner Mercury Capital, for a knockdown price of less than $50m, less than a tenth of the price paid by Bauer in 2012, and only slightly more than the $40m Bauer was forced to pay for rival Pacific Magazines two weeks prior. The Pacific print contract is with Ovato's rival IVE.

It was only in November 2019 that Ovato opened its new supersite in Warwick Farm, the country's biggest print site.

Chairman Michael Hannan issued a clarion call to the government two weeks ago, calling for manufacturing to get the same level of support as other high profile industries such as airlines and the arts. Manufacturing employs around 850,000 Australians, with printing the biggest individual sector. Hannan has also said that things will never get back to where they were pre-Covid.

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