Union demands are madness

If you need any evidence that a dysfunctional culture is alive in the Victoria union movement, take look at the campaign against Kemalex.

Kemalex is a small family-run and owned business which makes plastic extrusions for the car industry.

As such it is a typical Australian manufacturer.  It is also a business highly exposed to competition from the world's new car manufacturing powerhouse -- China.

For decades Kemalex has run a successful plant in South Australia using, in part, contractors.

Earlier this decade it purchased a plant in Victoria which was in receivership.

In 2003 it signed an enterprise-based agreement (EBA) with the National Union of Workers that included the right to use self-employed contractors on the site.

It hired additional staff, all as contractors.  It kept existing staff as unionised employees.  In total the Kemalex purchase created or saved 82 full-time jobs.

The Melbourne plant, however, remained uncompetitive.  The EBA prohibited the plant from operating 24 hours a day, five days a week, as the SA plant did.  It also required employees to be paid for 38 hours a week for 35.5 hours work.

When the EBA came due for renewal, Kemalex offered a substantial wage increase on the condition that hours paid equalled hours worked and 24-hour operations be allowed.

The NUW declined the wage increase and the requests for changes to pay and shifts.

It also demanded that all contractors be removed and be replaced by unionised employees.

On April 27 this year, the union called strike at the Kemalex's Melbourne plant.

Two employees resigned from the union in protest.  They and another 13 employees crossed the picket to help contractors keep the plant going.

Then the full force and resources of the union movement descended on Kemalex.  The MUA, CFMEU and AMWA joined the NUW and ACTU in the action.

The main accusation against the firm has been that it was attempting to exploit people by forcing them onto contract with loss of benefits and the burden of red tape.  In truth, there was no attempt to induce existing employees to become contractors.

Contractor rates of pay are generally 45 per cent higher than comparable employees, to compensate for loss of paid holiday and other entitlements.

Moreover, all contractors are hired through agents who handle PAYG, BAS, superannuation, insurance, and other legal requirements.

As a result, a small firm struggling against fierce international competition has the full force of the union movement trying to shut it down.  This is madness.

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