For The Labourer is Worthy of His Hire

The Seymour Abattoir Story

John Dawson

I am a farmer producing beef, wool and sheepmeat.

When I came into the industry in 1972 I asked a local agent what sort of cattle I should produce and at what age and time of the year they should be sold. The answer was---"just produce them and when you think they are ready I will sell them for you".

That is the nonsense which has been driving the meat industry for a long time. It should be no surprise to anyone that in 1973 the sale of a 15 month old steer would pay a station hand 3 weeks wages. In the depth of the beef crash it took 3 steers to pay one week's wages. At the moment it is about a steer to 1.5 weeks wages.

It is one of those things which makes one a bit pensive.

In my time as President of the V.F.F. Industrial Association I had cause to think a great deal more about some industrial aspects of the meat industry. Farmers tend to get very terse about sending cattle in, in top condition, and find that cattle are not wanted because the meat workers are on strike.

Bill Matthews was running the Seymour Abattoir. He had created it out of a local butcher's slaughter house and over almost 20 years built it up to a capacity of 1,000 sheep and over 100 cattle a day with a rendering plant attached. He had run foul of the AMIEU largely for working and doing work for other plants closed by industrial action. The union demands had become insistent and he accepted support from the Victorian Farmers and the National Farmers Federation in 1986 and onwards. An outbreak of industrial action in 1988 caused him to close the plant and to concentrate on rendering. The bank took control in November 1988.

The NFF refused further assistance. No alternative finance was available. I had held the view that if farmers wanted to really do something in the meat industry they had to have a hand in the operation. By May of 1989 Elinora Properties Pty Ltd had commenced operations. Bill Matthews was Managing Director. His family and mine each had a half interest in it. It owed no money.

Lenders were not interested in providing working capital in an industry which deals with a highly perishable product, has a very bad record of financial failure, but more particularly was dominated by a union well known for being difficult. None of these factors are unrelated.

Reluctantly we lent money in for working capital and gave guarantees to enable stock to be bought on tight credit terms through Stock Agents. We took security over the plant. The expectations were that we would be able to reduce our involvement and increase capital by injection of other farmer's equity as soon as it became profitable. We also believed that Bill Matthews deserved continuing farmer support for his almost lone efforts to provide real resistance to AMIEU demands for adult wages for youngsters and other conditions inconsistent with efficient operation: short days and limitations on throughput.

The management set about re-establishing the business but after 18 months of huge effort the business could not continue without further capital. It was not available in spite of intense searching. An auction sale produced no bidders and closed. We continued to try to attract other participants.

We concluded after many unfruitful approaches that investors did not believe that a business with a reputation for standing up to the AMIEU could succeed.

In March of 1991 the Full Court of the Federal Court rejected the BWlU's appeal in the Troubleshooters Case. Brian Groves was anxious to put the Troubleshooters contract labour system into place. I offered him the opportunity to do it at Seymour. He and his wife came back to Victoria.

I called a meeting of farmers in April 1991 near Seymour by obtaining assistance with identifying some who were likely to be interested in forming a steering committee to set up an appropriate corporate structure. Out of that steering committee came the board which has worked tirelessly.

I took Brian to Casino and Murgon to meet the managers of Co-operatives there running successful meat works. He started at the abattoir on 1st June.

Then followed agonising decision making and careful planning which produced The Seymour Meat Processors Co-operative Ltd. A lease with a rental based on throughput with the owners and an option to purchase. A Business Plan. A large public launch to attract membership in September. An intense works program, mainly financed by the owners. An underwriting from the NFF and 150 members and $135,000 cash capital. A licence to operate and a commencement on 4th November using contract labour recruited and supplied through Troubleshooters were all put into place. There was a deal of publicity and huge local support. There was no picket at all.

Brian Groves has described the system as it works at Seymour in an article and I have his permission to quote from that.

"I served as Managing Director of Troubleshooters Available from 1981 to the end of 1990. When the crunch came, all our personal assets were propping up the agency. We consequently lost our home and all our assets, and when Troubleshooters could no longer afford to pay me a wage, I moved my family to N.S.W. and cut timber to pay the rent and feed the family.

It was at this time that a group of Victorian farmers approached me, asking if I would help set up a farmer co-operative to restart the industrially crippled Seymour Abattoirs with agency contract labour, which would introduce an alternative labour system into the troubled meat processing industry.

As the new General Manager of Seymour Meat Processors Co-operative Ltd, I offered voluntary unionism to all workers who applied for positions at the plant. No worker opted for union membership and the only union members currently at the plant are the two meat inspectors who are Commonwealth employees.

At Seymour there was, from the outset, a clear understanding on the part of management and worker of the necessity for performance and accountability. Hourly rates were offered and piece rates, incentives and profit-sharing were negotiated. Sixty workers were signed up as contractors through the agency to fill 35 to 40 daily positions. A rotating roster was created to allow for genuine job sharing and natural selection, with encouragement for skills upgrading provided by management for all workers.

The enterprise was ready to start. Well, not quite. Six Government departments or authorities had first to be satisfied before the Co-operative could begin operations.

Government bureaucrats seem tied up in knots with regulations and rules applicable to the meat industry and have scant appreciation of the necessity for enterprise expediency or cost and time minimalisation.

The Public Service Union sent their President to the abattoir five times in the first two months of operation supposedly to look after the interests of their two union member meat inspectors causing unnecessary disruption. However, the Meat Workers Union did not interfere after discussions at A.C.T.U. Executive level. There was no support at Seymour for Wally Curran and his antics.

Some government officials were apologetic as they continued their extraordinary interference, vacillation and deliberation at the plant. However, five months and $250,000 later - none of which was spent on productive technological improvements to the plant---the abattoir was allowed to begin operation in November 1991.

It is not surprising that the Victorian meat processing industry is in such disarray when you see the activities of one of Australia's most militant unions conjoined with costly over-regulation by government bureaucracies.

The claim is that it is never the fault of the individual bureaucrat. It's "the system" that he or she must adhere to. You can never find anybody to take responsibility for the decision, or the lack of decisions of the system. Castle-building, insular outlook, little people fiercely protecting their power base, feather-bedding, over-manning and lack of accountability typifies the Victorian Meat Industry as it is today.

What good has come out of the experiment at Seymour Abattoir? Well, as General Manager, I am seeing a perceptible change in worker attitudes. It's more like being the coach of a team. All the players know what they have to do and it's my job to coordinate their efforts and develop a team spirit that eliminates the "us and them" problems at the abattoir.

I have found that where the concept of "us and them" is eradicated from the line of management, workers steeped for decades in the propaganda of the need for such division, will create an "us and them" amongst themselves. Demarcation and disruption is the result. This, in part, can be eliminated by setting all workers on the same pay rate with incentives for performance to encourage the more skilled workers to perform at a higher level of productivity, rewarding them for their outcomes in quality and quantity.

The contracting system can be tailored for each industry and even each enterprise. The flexibility of the system encourages initiative and positive operational suggestions from the workforce, whose primary motivations are more money, better conditions and security with a company whose productive success will ensure these rewards.

The agency contracting system is a High Court-approved new system of working smarter which benefits the productive worker and the enterprise equally.

The system will continue to evolve and improve as it is applied to a wider range of industries. With commonsense and good communication, there is now a productive workforce at Seymour Abattoirs that is highly motivated and no-one there would entertain a return to the unionised award system.

There are a number of radical changes being introduced at Seymour, some of which have proved to be more commercially successful than others. The farming community is presently much debilitated and to achieve the necessary financial membership and support has been, to say the least, difficult. Despite the state of Victoria's economy and particularly given the declining state of the Victorian meat industry, Seymour Abattoir has established itself after an expensive and difficult start. With much greater farmer financial support, it will achieve all the goals set out in the Co-operative's Business Plan. However, the labour reform initiatives have already been an unqualified success."

Due to the need to have a profitable business operating at a satisfactory plant under excellent management the Board has instituted a pause in its operations to re-group and fix the deficiencies which have been found.

There is a new wave of support coming in. The contractors have volunteered to contribute to the capital out of earnings. The NFF and VFF have become vociferous and even cheque flourishing to such an extent that the Directors can contemplate resumption of operations to retain the customers it has and keep others now offering interest.

There is some interest from three overseas sources looking for products with the expectation that investment would be required.

The opportunities offered by the Co-operative to the industry are in a commercial sense very real. For farmers wanting to make direct contact with butchers shops or wholesalers it is possible for them to sell carcasses direct and get the full return including the hide and by-products. For butchers and wholesalers who want to buy stock and have it processed and delivered we can do it. For groups of producers there is an opportunity to organise selling a branded product from a breed or district. It is possible to get a more even flow of stock and market information back to farmers.

While these concepts are not grasped by everyone there is at last an alternative. There is also an alternative to the provision of labour from a Union dominated workforce. It must not be allowed to disappear. The challenge is out to farmers. Graham Blight, NFF President has said "If you don't support what is being done at Seymour don't ever come grizzling to me about the Meat Industry in Victoria."

Membership of the Co-operative is available to "a person who desires to support innovative methods of engaging people to perform work."