Today is the International Day of Mourning

In other news :

• Members at Taree show how to do it
• Food Authority gives the BPB a lesson in consultation
• Careful what you say on Facebook (or even Twitter)
• Superannuation and members on contracts or TRPs
• LGSS attacked over the increase employer contribution

28 April is the International Day of Mourning

The International Day of Morning commemorates those who have been killed or injured at work. It is a sobering and confronting reminder of something we don't really think about - normal people, just like us, who go to work and don't come home. Its something that happens that not just means a death at work but a personal impact on workmates and a devastating impact on friends and family.

There is no legislative obligation in Australia requiring companies to report in their annual reports lost time due to illness or injuries or death. It makes it very hard to work out whether it is more dangerous to work, for example, for BHP, Lend Lease or Leightons Holdings - just picking three at random. These are all big Australian public companies in which institutional investors like superannuation funds would be long-term investors.

Good health and safety at work is a fundamental and critical part of how a company should be assessed. The concept of shareholder value or providing a profit to shareholders should not override the human cost involved in delivering that value or profit.

BHP in their last reported year killed 11 employees at work and this year to date its 7. At least in BHP's annual report, the statistic is easily found at the front of the report in a prominent way and is dealt with as something which is unacceptable and needs to be improved. Leightons Holdings, for example, make the information hard to find and, in leaving it to much, much later in the report, fails to provide proper recognition of its importance. On an hours worked basis, their figures are worse.

Companies report deaths and injuries in different ways. As a proportion of the workforce, as a proportion of market capitalisation and sometimes in relation to hours worked - but never consistently so that comparisons can be made. Governments should act to make sure they do.

These statistics are a stark indication of things that happen that shouldn't happen and which create incalculable human suffering and misery. Think for a minute how it would be if someone in your household didn’t return from work.

And when you think of companies doing the wrong things about health and safety, it is an appropriate coincidence that the Supreme Court last week found a string of company directors from James Hardie guilty of telling porkies about a media release (which the minutes show had been adopted by the Board) that was untruthful about how the company was funding its huge liability arising from killing its own workers.

Company Chair (who insisted on being described as a Chairman) Meredith Hellicar (picture above) bore the brunt. Described by Justice Gzell as "a most unsatisfactory witness", Hellicar and the rest of the Board were convicted of misleading the public. This conviction also coincided with admissions by James Hardie that the Global Financial Crisis would challenge their ability to finance their compensation fund.

In Business Day in the Sydney Morning Herald on 24 April, Elizabeth Knight said this:

"But as this chapter closes on the great James Hardie saga, one cannot help but wonder about how a company that has for decades played hard and fast with schemes to minimise tax, restructuring to avoid its obligations to compensate its victims, and meddled with the truth, can have survived.

It has been forced to repay liabilities, shamed by unions, governments and victims, publicly flogged by the media, been the subject of a special commission and ultimately brow-beaten into appropriately compensating its victims."

How has it survived, knowing what we know about how it has conducted its business? Simple really, virtually all big institutional investors would be invested in James Hardie (even as they acknowledge its poor governance and health and safety) and in a terribly sad irony, even the superannuation funds to which the dead and dying James Hardie employees belong.

It's time someone found a way of bringing these companies to account.

Why shouldn't there be a legislative requirement that companies call an Extraordinary General Meeting of shareholders whenever there is a death at work? Why shouldn't there be a standard and consistent reporting framework so that institutional investors (and even ordinary members of the community who want to work out which company they think is a good one and which company isn't) can, when they are valuing a company to make a judgement about investment consider how many people they kill and as well as things like their price:earnings ratio?

The James Hardie convictions make us all aware that companies have moral obligations to the community, and those who work for them, as well as a financial obligation to shareholders.

The Herald got it right in their editorial on Monday 27 April:

"The core legal argument of James Hardie is that it was not the company's fault that people died terrible deaths. It was the fault of subsidiary companies, not the parent company. Therefore the liability lay with them. The compensation trust set up by the parent company went beyond its legal requirements. Misleading comments were made by the public relations department, not the board or senior management.

That, in a compressed nutshell, is the James Hardie case. It is morally repugnant, and transparently so."

Members at Taree show how to do it

We have been involved in an issue at Taree Council about the appropriate grading of positions since 2007. Convinced that all of our jobs were really one level below where they shoudl be, we met with the Council and they gave undertakings that certain things would happen in the middle of 2007. They didn't.

In the middle of 2008 we met again with a new general manager, Gerard Jose. He agreed to have all the positions evaluated by 00Soft (the owners of the old Wyatt job evaluation system) and a market survey done by Mastertek. Sometimes these things take longer than you would like (particularly when HR is involved because they seem to operate to a different time frame and list of priorities) and when that started to happen the General Manager agreed that whatever was the result of the job re-evaluation exercise, any new gradings would apply from the date he agreed that the exercise should proceed.

It's nice to find a General Manager prepared to reach agreement and then stick to it.

To cut a long story short, members were resolute and firm in their conviction that this exercise should be done properly and when the 00Soft exercise found that we were right - and that all of our positions really were one step below where they should be in a seven grade salary system – we then had to determine how to place people on the new grades.

The Council proposed "convenient-fit" which meant that employees would go to the next step that would provide them with a pay increase. We were keen for members to carry their salary system step with them into the new grade.

In the end we were able to conclude an agreement with an honourable General Manager to put everyone on the midpoint between what the Council wanted and what we wanted. And how can there be a better compromise than that?

We need to acknowledge and congratulate members at Taree for their commitment to this exercise and, in particular, the role of our delegate (and a member of the Committee of Management) Jim Boyce. Sometimes it's a challengeto be an effective delegate because of anxiety about how management might perceive your activism but Jim was able to tread the line between his responsibilities as a manager and his role as a delegate. Well done, Jim.

On the day after Taree's General Manager agreed to reevaluate positions in 2008, the General Manager at Port Macquarie Hastings also agreed to do the same for a handful of building surveyor jobs.. Things are a little bit slower apparently at Port Macquarie.

NSW Food Authority gives the BPB a lesson in consultation

We are all a bit sick of the Government, the Department of Planning and, particularly the Building Professionals(sic) Board talking about consulting with stakeholders and then just crashing on and doing whatever they want. If it wasn't for the decision of the Minister for Planning this month to delay the timeframe for accrediting council employees, the BPB would be forcing people to do what they didn't want to do without regard to the attitude of those employees and the industry and with a scheme that was inadequately conceived and which contained more questions than it did answers.

What an absolute pleasure then to find that the NSW food Authority has established a Food Regulation Forum under the NSW Food Act to assist, evaluate and provide advice to the Authority in the sharing of functions between enforcement agencies.

The industry was advised in late February that the Forum had been established to represent a wide range of stakeholders: local government associations and general managers, professional organisations (somewhat flatteringly they include us in this description) and the Food Authority.

depa is represented on the Forum by Vice President Andrew Spooner and Member of the Committee of Management Les Green.

In advice to councils in February the independent Chair advised that "the Forum is particularly eager to consult with councils on how they are progressing with the FRP and identify ways in which we can improve it".

Let's hope some of this obvious consultative commitment rubs off on that offensive government authority - the BPB.

Careful what you say on Facebook (or even Twitter)

It's hard, being an old bloke, to understand the attraction of opening yourself to all these new friends and, as interested as you lot might be in depa tweets of all the important things like whether the bus was late, whether Jody has had a haircut or whether I've had time to shop for dinner, it all seems like time wasted when you could be reading a book or doing something else.

What people choose to put on Facebook can be a problem. Facebook has already found its way into arguments about breaches of privacy by others (if you put it on your site, why complain if someone else tells everyone?), details of reckless or drunken behaviour on someone's own site have been used as a sign of general drunkenness and poor behaviour in criminal trials and now people are starting to get sacked because of comments made about their employer.

Last week depa was involved in a dispute in the Industrial Relations Commission about disciplinary action taken by a Council and it was the second dispute before that member of that Commission that week about Facebook comments.

Be careful. If you do put something on Facebook, make sure your privacy settings are well set and only people you think are safe to access your comments can do so. Remember that without privacy settings, anyone can see what you think or do.

Better still, why not read a book?

Superannuation and members on contracts and/or TRPs

In February we sent a special note to members about the decision of the LGSS to remove a shortfall in the Defined Benefit Scheme - by increasing the employer contribution from a multiplier of 1.9 of the employee's contribution to a multiplier of 4.56. We said that we were working with the LGSA on how this should affect employees on contracts and TRP arrangements.

The LGSS Board on 26 March reacted to pressure from the industry and reduced the financial impact to a multiplier of 3.8 (a decision of the Board carried six votes to two - with two of the Board members (I was one of them) preferring to stick to the Actuary's original advice and fix the shortfall over five years instead of ten) but there are still issues as councils deal with this increased employer contribution.

When you think of it, there really shouldn't be. It is, after all, called the "employer’s" contribution but there are a number of councils out there which will try to make employees pay the "employer’s" contribution from the employee's own salary component.

On 30 March we wrote to every general manager in the State seeking an assurance that they would not try to make the employee pay a contribution that should be paid by the employer. Most councils have responded to advise that they won't and that they will do the right thing but, there are some who are spoiling for a fight. Liverpool, in particular, said "Council will not be increasing their remuneration packages of the affected staff or making additional superannuation contributions on their behalf." So there. And Warringah agrees. Others are still wondering and taking advice.

We will be meeting again with the LGSA on 5 May to continue our common approach. We have also foreshadowed to the LGSA the names of those councils which have told us that they will be making employees pay in anticipation of filing a dispute with all of those councils later in the month.

In the meantime, if your council intends to make you pay something which is their obligation, let us know and we will add them to the list of councils to be discussed with the LGSA and, if we can't reach some agreement, in the dispute we will file later in May.

LGSS attacked over the increase employer contribution

Gee, can’t general managers be thick?

Leaving aside those who think that the employer's contribution should be paid by an employee, what about those that don't understand what happens if a defined benefit scheme is underfunded? These are, of course, the same general managers who understood what happens if a scheme is overfunded. Namely, that if the annual actuarial review finds that the fund is sufficiently overfunded then it should stop collecting employer contributions, and you have a contribution holiday. But they don't seem to understand that if the fund is underfunded, someone has to top it up.

One general manager who has famously gone into print in an attack on the LGSS is Manly's Henry Wong. Henry is clearly not a financial expert (Manly being one of the councils badly stung by CDOs) but he hasn't been inhibited by that and has figured prominently in attacks on the LGSS including in his own local papers.

In the Manly Daily on 2 April he claimed the LGSS should've known about its financial commitment because the scheme closed in 1992 and there is a known and limited number of employees under it. What is not known, of course, is the final salary of those employees at retirement (or even when they retire) and it is the final salary that determines the payment in a defined benefit scheme. Obviously Henry is not a member of that scheme.

But Henry also thought that the LGSA had the majority of positions on the Board and is therefore responsible.

"Has the LGSA taken any responsibility for the current situation facing the LGSS and the potential cost to councils? Were they aware of the LGSS's situation and how long? Given the LGSA has a majority on the Board of the LGSS, did the LGSA adequately inform themselves and the councils about the dilemma? If not, why not?"

Well Henry, it's like this. The LGSA doesn't have a majority on the Board and you could have worked that out yourself by having a look at the Annual Report or even checked the LGSS website or asked someone who did know. The LGSA has four members of the Board and the employees in the industry have four representatives as well. This is the standard industry fund model of equal representation between employers and employees. Still, why spoil a lusty diatribe with some facts?

And it is impossible to calculate the fund's liability for all members even if it did close in 1992. As the final benefit is a multiplier of final average salary, this is affected by many things including people becoming general managers. The higher the salary, the higher the benefit. Duh!

And what was done with the contribution holiday from 1999 to 2008 and the increased employer contribution from 1 July 2009 was based solely on the annual aerial actuarial review conducted by Mercer.

We left a message for Henry that we were happy to give him the facts so that he didn't sound so silly, but he hasn't returned our call. Maybe he will now? Then he can stop being Henry Wrong.

 

Yours etc

 

Ian Robertson

Secretary