Another blow for Toyota

Toyota’s Australian manufacturing future was dealt another blow today, when a Federal Court ruling prevented the company seeking workplace agreement changes it says are central to its long-term survival.

A day after Holden announced it will close its factory doors in 2017, Federal Court Justice Mordy Bromberg directed Toyota Australia to stop any action to vary the workplace agreement, including an employee vote scheduled for tomorrow (Friday, December 13).

The move comes after four senior employees lodged a complaint with the Federal Court, alleging Toyota Australia breached the Fair Work by attempting to vary its workplace agreement until it expires in March 2015.

The four shop stewards who brought the case against Toyota have also sought financial penalty for the company's breach, but Justice Bromberg has adjourned that part of the case until at least February.

First flagged in November, the proposed changes to Toyota Australia’s workplace agreement include revisions to terms and conditions designed to improve productivity.

The proposal represents a key part of Toyota Australia’s plan to become more competitive by reducing the cost of each car it makes by $3800 and its break-even annual production figure to 80,000 vehicles.

As part of its restructuring effort, Toyota shed 350 employees from Altona in early 2012 and offered 100 voluntary redundancies in October.

However, its approach to workplace arrangements is in contrast to Holden, which will close its factory doors despite its workers agreeing to a three-year pay freeze and an additional 16 minutes of daily work time as part of recent revisions to their workplace agreement.

Toyota Australia’s proposal honours two scheduled pay increases for about 2500 of the company’s manufacturing workers at Altona in 2014, ahead of a new workplace agreement in 2015.

To offset the $17 million extra in wages, one variation proposed by Toyota is that the standard 21-day Christmas break be halved to meet high Camry demand, especially from export markets that account for 70 per cent of the 106,000 cars Toyota will build in Australia this year.

Motoring.com.au understands other proposed changes include the axing of special long-standing conditions including ‘dirt’ and ‘respiratory’ money which have traditionally been paid to workers in areas like the paint shop.

Toyota argues that upgrades at its Altona plant, including a cleaner new paint shop, make those entitlements redundant.

Toyota Australia says it is now considering its options, including whether it will appeal the decision of Justice Bromberg, who ruled that Toyota’s bid to cut employee entitlements breached the no-extra-claims provision of its workplace agreement.

If it does not appeal the injunction against Toyota by its four employees, the company will require employee approval to remove the no-extra-claims clause from its agreement before the proposed changes can be put to a vote.

The Federal Court ruling could not come at a worse time for Toyota Australia, which has committed to producing facelifted Camry and Aurion models from 2015, but is competing with eight other Toyota subsidiaries for the right to manufacture the next-generation Camry from 2017.

Toyota Motor Corporation will decide its manufacturing future and export plan for Australia in the first half of next year.

If it survives beyond 2017, Toyota’s Altona plant will be Australia’s last remaining car factory, following the closure of Ford’s two Victorian plants by 2016 and Holden’s Adelaide and Melbourne factories the following year, putting the nation’s 160 tier-one parts supplies at risk.

Even before today’s ruling it said the departure of Holden in 2017 “will place unprecedented pressure on the local supplier network and our ability to build cars in Australia”.

Toyota Australia President and CEO Max Yasuda said he was disappointed with the outcome.

“We believe that we are within our rights to vary our Workplace Agreement provided the majority of our employees support the changes through a formal vote,” he said.

“The company is doing everything that it can to secure the future for our employees and their families.

“GM Holden's planned closure in 2017 will put our manufacturing operations and the local supplier network under unprecedented pressure, so it is now more important than ever before that we make urgent changes.

“A decision will be made next year on the next-generation Camry and export program and we need to take urgent action if we want to stay at the negotiating table for future investments.

“The proposed changes were designed to remove outdated and uncompetitive terms and conditions that make it difficult to compete with other Toyota plants throughout the world.”

The Australian Manufacturing Workers Union, which had recommended Toyota workers vote no to the proposed variations if Toyota was successful in the Federal Court, says it will continue negotiations with the Japanese company.

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