Related to this situation is a “Save Balfours Employees” facebook page that allows comments.
Without prejudice:
Telling this story is long overdue. It should have started years ago before the Balfours company went into receivership. This is the inside story, written by a collaboration of Balfours employees. But it is not complete, as the author is not a private investigator, or an experienced whistleblower.
A few years ago, the employees at Balfours took a paycut to “save the company”, as a result of the “Enterprise Bargaining Agreement” negotiated by the Balfours C.E.O., Malcolm Gibbons, and Union Official, Mark Hulme, from the Australian Liquor, Hospitality & Miscellaneous Workers Union (branch secretary, Mark Butler). The employees working on the production lines were told to vote for a pay cut to save the company. Malcolm Gibbons told employees that everybody in the company, from the lowest paid worker to the higest paid manager, would take a pay cut. The results of the first vote did not show a huge majority in favour of a yes vote, barely over fifty percent—not enough to be accepted.
Over the next few days the employees experienced more coercion. Rumours circulated that the company could go into receivership and liquidation, everybody would lose their entitlements and jobs, and the factory would close. Malcolm Gibbons and Mark Hulme pleaded with and begged the employees to vote for a pay cut. This resulted in a majority of the employees then reluctantly voting “yes” to the agreement, against their better judgement, for fear of these rumours becoming true.
A short time after the agreement went through the Industrial Relations commission, the company went into voluntary administration, then receivership. It would seem that the C.E.O., Malcolm Gibbons (who had only been there a very short time), another manager, Neil Spencer (who'd also only been at Balfours for a short time), Jennifer Lee (Human Resources Manager), and the other managers in Administration, had schemed a grand plan to buy back the company at a, now, markedly reduced price. The employees that took a pay cut had no idea that Management were planning to buy the company!
While the employees under the Enterprise Bargaining Agreement suffered a pay cut for nearly a year, the appointed receivers, Ferrier Hodgson, and the accountants, Sims Lockwood, refused to talk to employees in regards to how the company collapsed.
The employees were forced to sign a “deed of company arrangement” and other forms and papers. Who knows what the employees were signing? Nothing was properly explained, by either the union or the management.
Numerous attempts to have the company investigated failed. Was this deliberate mismanagement, or just bad management? By Balfours, the investigators, or both?
A number of employees had contacted the appointed receivers (Ferrier Hodgson), and the accountants (Sims Lockwood), to provide information regarding Balfours collapse. But they refused to listen, and said that, by law, they only deal with management, not employees. Investigations into possible mismanagement aren't going to discover much if they don't cross-check what management says against other sources of information.
Whole chapters can be written about how the company lost millions in a short amount of time. The harassment and bullying by management has all been documented by individual employees, who were targeted for speaking out against the company.
Balfours, the South Australian Icon, which was owned by Bob Seldon and Associates in New South Wales, was bought by the South Australian managers of Balfours, backed by the S.A. Liberal Government, which had assisted with a bailout of the company.
On Thursday the 22nd of July, 2004, another meeting took place at Balfours. Present was the new (L.H.M.U.) union official, Wayne Osborne, James McCabe, the Employee Ombudsman, and Jennifer Lee, the Human Resources Manager at Balfours. The company wanted to add additional terms to the the existing Enterprise Bargaining Agreement because they now wanted to produce bread, as well, with Jennifer Lee boasting of a new million dollar campaign to promote the product. This sounded like the “Bakehouse pies” debacle again.
The mismanagement or bad management, and wastefulness of company money and resources, led to the financial disaster, which led the company to collapse. Millions of dollars were spent on the installation of new equipment from overseas; the Gabriel Gaté project: “French Chicken”, and the Geoff Jansz and Margaret Fulton: “Bake House Pie.” Malcolm Gibbons took out a full-page apology in The Advertiser saying, “Sorry can't keep up with production,” but the reality was that the project had flopped, and production was scaled back to three days a week, etc. “Scratchie” money tickets in pie packets to promote the product, and T.V. commercials, all turned out to be a gross waste of money. Mention must also go to the “Mother Earth Project” export deal to New Zealand, which was a huge financial disaster. The unsecured creditors only got twenty-five cents in the dollar, and the Liberal Government bailed out the company with $9 million of tax payers' money, to help relocate the factory out of the city to the suburbs. Before receivership, the company was owned by Bob Seldon and Associates in N.S.W. The managers in Adelaide were wanting to buy back the company as, before then, it had been a South Australian “icon”, famous for it's “Frog cakes”. It would have been too costly to purchase, if the company was successful.
Next year, in 2005, the Enterprise Bargaining Agreement discussions will commence again. The original plan, assisted by the Liberal Government, was to relocate from the city to Dudley Park, but over the last few years the company has been buying more bakeries in Victoria, New South Wales, and South Australia. Now they plan to relocate to Dudley Park and to another site in Seaton—where they are proposing to produce bread.
In the meantime, Malcolm Gibbon's shares in the company appear to have been bought out by other investors. After only a short time at Balfours, he bought the company from the receivers. Then on December the 1st, 2003, a new C.E.O., Don Taig, took over the company.
Malcolm Gibbons, the previous C.E.O., also told employees that a 15% share in company profits would be distributed to employees. And what happened about the “Key Performance Indicators”? Malcolm left the company on the first of December, 2003.
The unsecured creditors got twenty-five cents in the dollar, back; and they could claim seventy-five cents loss in their taxation. But the workers under the E.B.A. are still waiting for the unfair management to reimburse them for the previous pay cuts. Each employee, under the enterprise bargaining agreement, had suffered a loss of approximately $1300 over a period of around eight months. Since then, the employees have found out that not all of the staff at Balfours took a paycut—the staff on salaries, adminstration, sales, etc., hadn't—and the union had increased their fees, to boot. And there were rumours that some of the staff had actually received pay increases, while the other employees, under the E.B.A., were taking pay cuts.
Without prejudice.