Judge enforces contract

There is a lot to dislike about Mordy Bromberg – and Paul Sheehan provides the details – but blaming him for the ultimate demise of Toyota manufacturing in Australia isn’t one of them.

As the motor industry analyst Joshua Dowling observed after reading Bromberg’s judgment: ”The fate of Toyota Australia’s manufacturing operations has effectively been sealed by a decision in the Federal Court today. The court’s decision to block Toyota from asking its factory workers to vote tomorrow on changes to shift flexibility and overtime bonuses means … the entire Australian car industry is likely to grind to a halt after Ford’s factory shutdowns in 2016, Holden’s closures in 2017 and a likely end to Toyota’s operations in 2018, when the current Camry ends its run.”

On Thursday, Toyota workers begin their three-week Christmas holiday, the longest shutdown in Toyota’s global manufacturing operation. Plus there’s their 17.5 per cent holiday pay loading, plus double time-and-a-half when they work on Sundays, plus shift premiums, plus generous long-service leave, plus no medical certificates for sick days, plus time off to give blood (usually on Fridays) – all of which the chief executive of Toyota Australia, Max Yasuda, has warned is unsustainable.

Which brings us back to Justice Bromberg and his decision not to allow Toyota Australia workers to even vote to consider changes to their workplace agreement. Toyota argued that it was acting within the workplace agreement if the majority of employees voted to re-open negotiations. Bromberg disagreed, saying the law did not allow such latitude.

I don’t know if the law does or doesn’t give latitude to modify workplace agreements outside of the negotiating period. It should, but if it doesn’t that is an inflexibility that reflects the previous government’s preference that unions be given special privilege even if it results in higher unemployment.

The real issue here is why did Toyota management agree to such a generous workplace agreement? Did the unions who negotiated such a generous agreement really think they were acting in the long-term interests of their members?

Looks to me that the judge has enforced a contract. A bad contract to be sure, but its not clear to me that the judicial system should be second-guessing the choices people make when entering into contracts.

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31 Responses to Judge enforces contract

  1. Rabz

    Bromberg made this decision solely because it concurred with his so-called ‘progressive’ worldview.

    He is a useless, blinkered, z-grade hack and typical of the pompous, waffling parasites who so often debase our ‘legal system’ by making it up as they go along.

  2. Abraham

    So the union negotiated a contract … it then presented the contract to its members … the union members then voted in favour of the negotiated contract … NOW they realise their greed will result in their unemployment.

    Cry me a river …

  3. lotocoti

    Sounds like Mordy was enforcing a contract.
    Perhaps Toyota would’ve gone to the mattresses during the original negotiations if they’d realised there really were limits to tax payer largesse.

  4. Simon

    I believe that any contract that extinguishes the functioning of both parties unless by mutual agreement in exact terms would have plenty of “wiggle room”. This is just a decision by a hack.

  5. Robert O.

    The unions have always had large companies over a barrel with the threat of industrial action and Toyota is no exception. That is the modus operandi. Remember the airlines, if it wasn’t the pilots, it was the hosties, or the refuelers, or the baggage handlers on strike every Christmas, Easter and school holidays. Now when the economic situation is poor they have to learn to change their ways or become extinct.

  6. hammy

    Rabz
    #1116892

    This comment amounts to contempt of court. Rabz ought to be prosecuted and forced to apologise to Justice Bromberg.

  7. Rabz

    Oh diddums, Hammburglar, you squealing little sook.

    I do hold Bromberg in total contempt. He’s an idiot.

  8. youngster

    Wasn’t the case about allowing union members to vote to consider renegotiating, not actually about changing the EBA? Surely if both parties to a contract agree to amend a contract, the court should have nothing to do with it?

  9. Fibro

    What a great decision. This will fast forward the demise of Toyota so I stop paying for them as well, and then when they do announce the closure, the blame will aimed directly at the farcical IR laws which may lead to change. You beauty.

  10. steve

    This comment amounts to contempt of court. Rabz ought to be prosecuted and forced to apologise to Justice Bromberg.
    ………and if he doesn’t, he should be hung by the neck until he is dead, dead, I tell you!!

  11. will

    Wasn’t the case about allowing union members to vote to consider renegotiating, not actually about changing the EBA? Surely if both parties to a contract agree to amend a contract, the court should have nothing to do with it?

    +1

    It is not enforcing a contract if you use a legal judgement to prevent the parties from reconsidering the T’s&C’s. Free agents should be allowed to renegotiate commercial terms.

  12. David

    Hammy if Rabz had said it in Bromberg’s court then maybe [and I stress maybe] it would be contempt of court.

    Outside of the Court Judges are not immune to criticism – you know that strange concept called freedom of expression. They are not the Lord’s Anointed and beyond criticism or reproach.

    And while Rabz can look after himself I think you will be waiting until the freezing of Hell before an appology eventuates.

    Back on the wheel Hamster.

  13. Can’t be contract law because the parties could mutually repudiate an existing contract. Has to be IR witchcraft contract law that binds employers and employees in a magical award Kingdom.

  14. Alan Moran

    The vote was on whether the workforce could agree to a mutual renegotiation – and on past experience they may not have so agreed. The Dictatorship of the Proletariat was not so sure they could trust the people to make the right decision and Judge B compliantly did their bidding thereby allowing democracy to to be defined as comprising only the cadres.

  15. Andrew

    Sounds like he’s enforcing the law, not the contract. The FWA, cleverly darted by Paul Howes, requires the parties to follow the EBA over the cliff. No doubt a deliberate feature of the Act – designed to prevent companies pushing back to “renegotiate” deals agreed in good times that proved unsustainable. And rubber stamped by their puppet Gillard.

  16. Michel Lasouris

    This discussion about the propriety or otherwise of Bromberg J’s decisions is more appropriate at another time, when hopefully he will be exposed as yet another incompetent.
    The really kernel of this nut is the future or otherwise of the Australian motor car industry; and I’d emphasise “car” as opposed to utes, vans and trucks.
    We are sold a box on wheels powered by an inefficient engine producing at least 50 h.p ( Kw) and often 100 or more, to carry most frequently one person at an average speed of 22 Kph in the urban area. The production of wasted energy is prodigious. And there is a lot to be said about the involvement of the Petrol industry, but not here.
    It is incontestable that it is total feasible to conduct people for the equivalent of c. $2 anywhere in a city, 24 x 7, within (av) 250metres of the point of departure, and without stopping, arrive at a destination (av.) 250 m from their destination, at 55 Kph consuming just 2 K.watts (continuous). This service applies to the elderly in their ‘gophers’, Cyclists, Disabled in wheelchairs, as well as erstwhile car drivers.
    Is anybody seriously considering this alternative? Well, yes, Dubai, Milton Keynes, and a cruder manifestation at Heathrow.
    It will happen for sure. But is Australia clever enough to use this turning point to grasp the opportunity for a better intra-city transit system, and an unique export opportunity?
    Hmmm.

  17. Bruce

    So a union is using the Fair Work Act as ruled upon correctly by Mordy “Mr 18C” Bromberg to do several thousand of their own members out of a job? Epic circular firing squad.

  18. jupes

    But is Australia clever enough to use this turning point to grasp the opportunity for a better intra-city transit system, and an unique export opportunity?

    Great idea Michel and I still get to drive my V8 outside the city limits.

  19. Tapdog

    SMH is running a poll of readers’ attitude towards government bailout of troubled industries. Interestingly the result currently shows 77% of respondents agree either that governments should not subsidize private industry (37%) or if they do so then the policy must be applied across the board9 (40%). Only 23% believe that public funds should be used to ‘help keep jobs in Australia’.

    I’d call it an encouraging result when nearly 4 out of 5 readers reject the hand out mentality.

  20. Michel Lasouris

    Hi Jupes! No-one is prevented from using their old fashioned cars…the roads will still be there, but only for trucks and those, like yourself; who are happy to expend ever increasing wads of cash to indulge in your passion. The rest of us will be happy to have a lot more money to spend ( no petrol, no insurance, to licence fees etc) whilst travelling in a secure, quiet, quick, manner without distraction and time to read, study, or reflect on our next missive to Catallaxy …….

  21. James B

    The problem is the law, not judges who enforce it.

    Repeal all law relating to workplaces relations. All of it, every bit. All law that governs what unions can do, all law that regulates unions and workers, all law that stops companies firing anyone who unionises, or for any other reason.

  22. rickw

    “The real issue here is why did Toyota management agree to such a generous workplace agreement?”

    You can’t swim against the tide. Car manufacturers are very exposed to subversive action by union members. eg. handle door skins roughly and they all come out with dents….

  23. ProEng

    Every contract has a “force majeure” clause or an implied clause that nullifies the the requirements of the contract for the period of the called “force majeure” For example if a business has a contract with a railway operation (government or private) to transport goods and there is a storm that washes away a vital bridge the railway concern can invoke force majeure to void the contract until is bridge is rebuilt (when ever).
    I would suggest that government withdrawal of a subsidy to an operating concern could invoke a force majeure claim. I have found many lawyers are incompetent and many deliberately give doubtful advice to stretch out a case to earn more money.
    There is a law that states that companies can not trade while insolvent. GMH (in USA) has kept Holden solvent by guaranteeing loans and injecting capital. Toyota (Japan) has done the same. Toyota could rapidly negate their employment contracts by going into voluntary liquidation for a short time. All contracts would be void then. Maybe even threatening that could get action from unions and governments.

  24. I am the Walrus, koo koo k'choo

    Car manufacturers are very exposed to subversive action by union members. eg. handle door skins roughly and they all come out with dents….

    Sack those who make the dents.

    If he culprits colleagues go on strike as a result, threaten to take the plant and jobs elsewhere.

    The solution, as with all cases of bullying, is assertiveness and the threat of hitting out with a Big Stick.

    Pay the Danegeld, on the other hand, and you’ll never get rid of the Dane.

  25. Richard Bender

    Many (all?) EBAs, including Toyota’s, have a clause that says the matters covered by the EBA may not be renegotiated during the term of the EBA. Employers tend to agree to it because, while it limits their flexibility, it notionally prevents the union from prosecuting changes – not that it actually stops them urging employees to go out on strike if it takes their fancy. In this case the judge was enforcing that provision.

    It is open to Toyota to seek to first change the clause preventing renegotiation. One would (naively, perhaps) hope Toyota employees would bypass the union and renegotiate. If I worked at Toyota and my choice was between unemployment benefits and a lower wage (a false dichotomy, to be sure, as I’d always be free to seek other employment), I’d take the lower wage and invite Dave Smith to shove his crocodile tears up his arse.

  26. dd

    Toyota signed the contract.
    And now, suddenly, they realized that the generous employment conditions in the contract will drive them broke?
    Why did they agree to it then? Did they not understand the contract at the time, or did they assume an endless stream of bailouts from Canberra.

  27. Oh come on

    I don’t think anyone here has any moral problem with a contract being renegotiated – provided all parties concerned consent to the amendment of their agreement. But Mordy prevented a proposal to amend a contract. This may be a feature of auch contracts, and Mordy ruled entirely appropriately; if so the law is an ass. Why not ask the employees if they’re willing to forego some of their benefits to safeguard continuing operations of the plants? Now of course the Toyota employees would have been well within their rights to tell Toyota to get knotted, but there’s no harm in asking.

  28. Fred Lenin

    The sooner the car industry folds the better the way things stand now the communist opportunist union “officials” who have never done a days work in their miserable ,scheming ,connivingn selfserving lives will be deprived of the union dues and that means less power and less money for the useless alp .win win for Australia!

  29. Tel

    I don’t think anyone here has any moral problem with a contract being renegotiated – provided all parties concerned consent to the amendment of their agreement.

    Voting does not achieve that. It merely provides for the majority of parties concerned to consent the amendment of their agreement.

  30. Cool Head

    Anything that hastens the death of unions is a good thing, Mordy must be congratulated.

  31. Combine Dave

    Toyota signed the contract.
    And now, suddenly, they realized that the generous employment conditions in the contract will drive them broke?
    Why did they agree to it then? Did they not understand the contract at the time, or did they assume an endless stream of bailouts from Canberra.

    Perhaps they correctly assumed that the Fed Gov and State Labor cash spigots would stop splashing their way if they didn’t obey the unions?

    I am just hoping that Abbott doesn’t double down on the ALP’s mistakes by acting to “protect” Toyota and not reducing restrictions on imports (both new and second hand) to Australia.

    Even if the general idea of a manufacturing base being in Australia is a desirable one.

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