Shutting down with respect

One of three pot lines at Hydro’s aluminium plant at Kurri Kurri, Australia, were curtailed in January 2012. The effect on the manning was to reduce by 200 jobs from 550 in December 2011 to 350 by the end of February 2012.

group photo from kurri kurri

Three months later, new consultations with the plant's workforce were initiated.

Power costs, unfavorable currency exchange rates and poor market prices for aluminium all contributed to losses, with little or no prospect for improvements in a reasonable time frame. The tough decision, to close down the production, was immediately affecting as many as 285 employees. The plant was acquired by Hydro in 2002.

During 2010/2011, a feasibility study had been carried out to see what turnaround actions were possible to stem the losses. Throughout this process, union delegates participated in the group meetings. Some stayed with the process all the way through.

The response from the workforce to the closure announcement, and the loss of 344 jobs, was muted. There were a few angry words regarding the communication approach, but aside from that, the workforce reacted with calm resignation. There was no shock or surprise in the news so there was little disbelief. Many people had maintained hope over the preceding months and effectively the mood was of these hopes having been dashed. We could phrase the response as 'bitterly disappointed, but not surprised'.

In the days that followed the announcement, the company entered into consultation with the Australian Workers' Union (AWU) on how the closure process should be managed and out of this, just one suggestion was that closure committees should be formed at departmental level. Union delegates would move to day work if they so desired, in order to facilitate the communication process across the site. The department managers and the union delegates were accustomed to working together in a positive manner so this came as no great challenge – it was business as usual, just with a sad outcome.

The management of the company, both from the head quarter in Norway and Kurri Kurri, emphasised the need for extra attention to be paid to safety over the coming months. Repeatedly, the workforce was reminded that during times such as this, it's easy for the mind to wander onto worries about job seeking, interviews, mortgage payments and the like, and that is exactly the time when serious accidents and fatalities can occur. It was clear that the common sense of this message was something the workforce saw, and responded to.

The Hydro model of industrial relations, is built upon three core principles; cooperation, communication and involvement. As part of the process all employees were offered:

  • Job market day
  • Financial advice
  • Courses to help find work
  • Pathways offered resumes, interview training, advice on career choices & training required
  • Counselling for employees who were struggling with the closure

Comments from employees and others may differ a lot, but the overall picture seems to be more positive than we often see when facing such exigent realities and processes.

Of the originally 550 employees at Kurri Kurri, 440 had by the end of 2012 secured new jobs or were retired.

Stakeholder dialogue

A dialogue process was introduced, including a meeting with HunterNet, the Hunter Business Chamber, the Department of Trade and Industry, and the Department of Employment, Education and Workplace Relations. The purpose was to discuss what more could be done to connect jobless employees with prospective employers. For comments and more information on the dialogue process, see separate stakeholder interviews.

At the end of the meeting, Tony Sansom, a Regional Director at the Dept of Trade and Industry (NSW Government) stated that he had never seen a company acting like this, and that he had only seen more brutal approaches to shedding jobs.

In contrast to this are some comments by Paul O'Brien, Site Senior Delegate, representing The Australian Workers' Union: "Even though the financial climate may have made the outcome inevitable, the decision by Hydro to fully close the Kurri Kurri smelter was particularly upsetting following the remarkable effort and hard work from the employees, the union and local management to address the fixed cost and efficiency issues."

On the other hand, he points out that the local management and human resources (HR) team at Kurri Kurri performed reasonably well throughout the closure process making financial and emotional counselling available to any employee that needed it.

"Resources and funding for outsource training of our redundant workers was generous and support services to help them find new jobs was admirably provided – Often from the HR department's own initiative. Approval by Kurri Kurri senior management to fund a commemorative day for redundant employees and publish a booklet commemorating the Kurri Kurri smelter was also commendable", he says.

"Overall, our employees were treated well and respectfully under these terrible circumstances and I thank the company for that. This cooperative approach from the company allowed workers to focus on the job at hand and respond with a safe and efficient closure of the plant," he says.

Jack Ritchie, Local Employment Coordinator, Department of Employment, Education & Workplace Relations, says he is impressed by how the closure of the plant has been handled.

"I have been in discussion with colleagues Australia-wide who are also involved in working with redundancies and they agree with me that the way Hydro has handled this is a best practice example. The early discussions with staff to prepare them for this possible eventuality, the tireless efforts to support people who prepare to seek employment with other employers and the partnership with DEEWR around the development and delivery of the Hydro Jobs Market was all done willingly, enthusiastically and professionally," he says.

Les Covey, Casthouse Senior Delegate, describes the transition as very smooth. "Workers and management worked together to make sure employees were well looked after," he says. "We were aware of the services available such as counselling, resume creation, training and assistance from Human Resources".

Trevor Morris, Carbon Plant Senior, Delegate Australian Workers Union, comments:

"I can honestly say I don't hold any ill feeling towards Hydro Corporate over the closure of the smelter. It's only common sense that says you can't keep running a business that is losing money and trying to keep shareholders happy at the same time. I can also say from a workers point of view that we did our best to stay open!!"

Three core principles

The Hydro model of industrial relations, is built upon three core principles;

Cooperation – we recognize that management and unions have one thing in common, and that is the need to create a successful, profitable, sustainable company as that will give all of us the best opportunity to get what we want – job security.

Communication – we believe in open and honest communication throughout the entire corporation. We believe in communicating both good and bad news in exactly the same way, and we believe nothing is to be gained from keeping secrets from our workforce.

Involvement – we believe in the inherent worth of every employee and the contribution they make to business success. Accordingly, we involve unions in as many activities as we possibly can. At Kurri, we particularly enjoyed union delegates and staff training together on subjects such as legislative changes, mediation, conflict resolution skills, and so on.

A commemoration day

On Sunday 23rd September, 2012 Hydro was hosting a commemoration day to formally close the Kurri Kurri aluminium smelter. All past and present employees of the Kurri Kurri aluminium smelter as well as members of the community were welcome to come along and enjoy the Commemorative/Closure day. It featured guest speakers, music, entertainment, rides for the kids, displays and a free sausage sizzle.


Updated: August 5, 2016