Trigger-happy boss misses the target
It all began with a 'smirk'. Ewin Hannan looks at an exercise in industrial pig-headedness
June 10, 2006
JIM Sutton liked the sound of John Howard's new workplace laws. In April, he used the Work Choices legislation to put his work force on individual contracts to lift production rates at his struggling engineering business in suburban Melbourne. If his employees didn't like it, so be it. The new unfair dismissal laws allowed him to sack recalcitrants.
Two months later, Sutton's company, Finlay Engineering, is being wound up. Twenty-eight workers have lost their jobs and Sutton has gained national notoriety as the bloke who supposedly sacked an employee for smirking.
So, is Sutton, as unions claim, a bad employer who ran down his business and exploited the new laws to limit his liabilities? Or was he a victim of a political campaign by far-Left activists, including the Socialist Party Australia, to embarrass the federal Government?
"I'm being driven out and I believe I was set up by the union for a test case against the new IR laws," Sutton says.
Dave Oliver, Victorian secretary of the Australian Manufacturing Workers Union, says the episode highlights the type of "rogue" conduct encouraged by Work Choices.
The company has supplied automotive components to car manufacturers for 50 years. But it has had a troubled history, having been in administration previously. Just three of the 28 workers are unionists.
On April 4, Sutton told staff the workplace laws gave him "much more control" and if they were not prepared to meet production targets, they should quit. As an employer with fewer than 100 employees, Sutton's company is no longer subject to unfair dismissal laws.
He told the workers they had to sign a one-page handwritten Australian Workplace Agreement. Although he said award conditions were guaranteed, the union says the base pay rate was cut and a flat rate was imposed for night shifts.
Knowing the company was in trouble financially, the workers, many of whom were long-time employees, were upset at changes to redundancy provisions.
They had been entitled to three weeks' pay for each year of service, but the contracts capped the redundancy entitlement at 14 weeks.
What followed won't be written up by government spin doctors as a Work Choices case study.
According to Harry Rai, a union member who had been there for nine years, Sutton told the workers: "From now on, if you don't meet your production targets ... you'll be sacked. If you don't work the hours we tell you to work, you'll be sacked. If you don't obey your management staff, you'll be sacked." Sutton denies this version.
"I was just dumbfounded," Rai says. "I was thinking, 'What's going on? Am I in the right country?' ... My employer then said, 'Take the smirk off your face.' I didn't reply. Vince, my other union colleague, said to him, 'Show respect.' He said, 'You're dismissed for being disrespectful, for answering back.' I said, 'What? You can't sack a person for just saying, Show respect.' He said, 'You answered back as well, you're sacked."'
Fellow employee Vince Pascuzzi says he and Rai were dumbfounded. "Harry looked at me ... it looked like a grin but it was a surprised look. Jim said, 'Wipe that smirk off your face.' I said, 'Jim, show some respect, don't speak to Harry like that.' He said, 'You answered back to me, I'm sacking you."'
Sutton says Rai was not sacked for smirking. "I said to Harry, 'There's no use keeping that smirk on your face, it doesn't mean anything.' He just walked away and didn't take it any further. The next thing, Vince came after me and said, 'We've got to talk.' I said, 'There's no use talking to you, Vince, because you never listen.' His words then were, 'I don't want to f---ing talk to you in any case.'
"I said, 'Well, if that's your attitude, I don't know whether I want you working here.' He said, 'Well, sack me, sack me then.' I said, 'All right then, you're sacked."'
Rai approached him and said, "If he's sacked, I'm sacked too."
"I said, 'If you want to be sacked then, you're sacked."' A third employee, who was ill on the day of the meeting, was also dismissed.
The union used the smirking claim to get attention for their political campaign against Howard, saying it showed the laws were extreme and absurd. At this point, various left-wing militant groups jumped in and up to 300 people blockaded the factory, shutting it down.
Union Solidarity, a group of "grassroots trade unionists" with links to the Builders Labourers Federation, joined the so-called "community assembly".
Anthony Main, who was a national organiser with Socialist Party Australia before setting up the rebel union Unite, says party members were involved.
Trucks could not leave the factory and car companies threatened to scrap contracts with Sutton as he could not guarantee supplies. Sutton unsuccessfully sought police help and wrote to Workplace Relations Minister Kevin Andrews three times seeking federal assistance to take the union to court over the picket. The minister declined.
Sutton caved in and reinstated the workers on old conditions. A day later, Pascuzzi took a day off. Oliver says he was entitled but Sutton was furious, contacting A Current Affair, which sent out a crew to film the workers.
Pascuzzi went on stress leave. Workers started taking days off, leading to significant levels of absenteeism. Claiming he couldn't stay afloat, Sutton put the company into voluntary administration.
Union officials admit there had been a "lot of absenteeism" but said workers knew the factory was in trouble and they were out looking for new jobs.
"Have a look at this workplace," Oliver says. "That's why you have got the relationship you've seen."
Oliver says the switch to contracts had reduced workers' entitlements from $1.2million to $700,000. "They have lost tens of thousands of dollars with the stroke of a pen," he says.
Sutton has advice that $350,000 is owed to workers.
"It's just not worth running a business," he says. "By the time I pay out all the workers' entitlements, I've got no money. I'll probably have to start a lawn-mowing round."
