April 21, 2012
End of the road … sacked worker Fadi Hassan with his score sheet. Photo: Rebecca Hallas
Toyota’s sacking of 350 staff has sent out shockwaves, writes Deborah Snow.
In the Hollywood movie Up In the Air George Clooney plays a ”termination engineer”, a man who travels America sacking workforces for bosses who can’t stomach the task themselves.
”This is what we do, Natalie” he tells a junior colleague who starts to waver. ”We take people at their most fragile and set them adrift.”
On Monday and Tuesday this week Toyota Australia set 350 of its employees adrift – 10 per cent of its workforce. They were picked off the shop floor at the factory in Altona, escorted by security guards to locker rooms, asked to empty the contents of their lockers into plastic bags, and taken to a van that drove them across the road to a processing centre for formal termination.
Many asked whether they could go back down the factory line to bid farewell to long-time workmates. They were refused – though a spokeswoman now says the company will organise ”some kind of farewell”.
For senior shop steward Charlie Marmara, who’s been at Toyota for 24 years, it was the hardest two days he’d ever had on the job.
”The major surprise for me was the heavy-handedness,” he told the Herald. ”People were in tears. I had one guy, 61 years old, doesn’t speak good English, he had been there 33 years. I had to sit with him for 45 minutes in their so-called quiet area before he calmed down – this guy who was old enough to be my dad.”
Redundancies are becoming a depressingly familiar feature of the employment landscape as more companies battle the ravages of the rising dollar by moving jobs offshore or making do with fewer workers.
But it’s the way Toyota has gone about its 10 per cent cull that has drawn the ire of unions and raised eyebrows among human resources experts with long experience in managing redundancies.
”The process has to be fair and transparent and the workers have to be treated with dignity from beginning to end,” says Tony Crosby, the managing director of Associated Career Management Australia. ”You’ve got to set up a process that withstands scrutiny later on. I don’t think [theirs] does.”
One of the most controversial features of the Toyota process was that it moved to compulsory redundancies as a first, instead of last, step – overturning a long tradition in Australian workplaces. On top of that, it stigmatised expelled workers by making plain they were the group who’d scored worst against a vague set of nine criteria that Toyota aggregated and weighted according to a formula that it won’t publicly reveal.
These criteria included things like a mark [out of five] for adherence to ”Toyota Way Values” – defined as ”respect for people and continuous improvement in daily interactions with peers and supervisors” – and a mark for diligence, with a long dictionary definition of diligence attached. When workers were handed their score sheets, no one could tell them what their final numbers actually meant or what a ”pass” score would have been.
Paul Gollan, a management expert at Macquarie University’s business faculty, says it’s highly problematic that Toyota has used ”performance management criteria” to select people for redundancy when strictly speaking redundancy should be about laying a person off because a job is no longer there.
”They haven’t actually identified particular jobs that need to go, they have identified individuals. Now as a principle at law, that’s a problem” Professor Gollan told the Herald.
If the process was really about performance management, it should have been handled differently, giving workers counselling and a chance to come up to scratch.
Whether shop stewards at the plant ever agreed to selection criteria in the weeks of talks that led up to the sackings remains a point of contention, with senior union officials denying it and Toyota insisting they had.
But in any case, union leaders are deeply suspicious about the way the criteria have been applied.
Ian Jones, the head of the vehicle division of the Australian Manufacturing Workers Union, says it’s now apparent there are a disproportionate number of shop stewards, health and safety representatives, the injured and those who’ve made work cover claims among those laid off.
Union suspicions haven’t been helped by the fact that in February, the Toyota Australia president, Max Yasuda, complained about a culture of ”sickies” among his workforce.
An employment specialist at the legal firm Maurice Blackburn, Giri Sivaraman, says Toyota’s use of a scoring system is not the first time he has come across the tactic but often it produces mysteriously skewed results. ”What I have unfortunately encountered in the past is elaborate matrices set up which disguise the real reasons for selection,” he told the Herald. ”You find a disproportionate number, for example, with injuries or who are older, and so immediately you have concerns as to whether the process is a bit of a fig-leaf.”
Bruce Gregory, the chairman of Human Capital Holdings whose companies have handled hundreds of redundancies, said the right way to start is with a generous voluntary program. If that doesn’t reduce staff sufficiently, then compulsory redundancies should be carried out in a way that preserves dignity.
”Everybody is worth something to somebody,” he emphasised.
The union’s Dave Smith says that for the past 25 years, all local car makers have managed staff reduction programs triggered by reduced production volume on a voluntary basis, which accounts for the shock at this week’s process. ”For the first time in living memory, for a lot of people, we have had workers who wanted to continue on with a car maker being sacked, and those who no longer wanted to continue being told they can’t leave,” he said.
Of the 350 laid off this week, less than 90 left of their own volition.
Professor Gollan says there is growing restiveness over the rigidities of the Fair Work Act among employers and the Toyota action looks like part of a groundswell by business to get the Gillard government to review the legislation. But while he has some sympathy for a review of the law, he says the way the company has gone about its workforce cull will leave a lot of bad blood.
Meanwhile the union will continue to apply pressure on Toyota through a string of legal challenges to the redundancies starting in the Federal Court next week.
Smith says one factor Toyota has seriously underestimated is the impact on the morale of those employees left behind. ”You have to seriously question whether people are going to go the extra yard for the company going forward. It will be a very black and white relationship from this point on,” he said.