Carter Holt Harvey’s particle board mill at Tumut will close at the end of this month, leaving 88 employees out of work.
The final production day will be Monday, February 25, with staff remaining on site until February 28 to perform clean up duties.
A letter released this week to suppliers by the company stated that a “significant scarcity of fibre supply in the Tumut region made it difficult for the company to operate the Tumut plant economically”.
The plant produces raw particle board as well as laminated particle board products used in a range of building applications, including kitchen and laundry joinery.
Staff were told about the impending closure back in November of last year.
CFMEU union delegate Jason Grills said all 88 staff would receive their full redundancy entitlements under the existing enterprise bargaining agreement, last negotiated three years ago.
Mr Grills noted staff would also have access to training and employment assistance as part of their termination package.
“It’s obviously disappointing jobs are being lost,” Mr Grills said. “In a small country town like Tumut, the ability to move on to another job is limited.
“All workers will get their full redundancy payments as per the EBA, which in most cases will be above and beyond National Employment Standard (NES) provisions.
“For example, some workers will get 40-50 weeks pay – the NES caps redundancy at 12 weeks.”
The company will pay for employment assistance through private provider Frontline, while workers will also receive assistance for training of their choosing, which will remain available up till June 30.
Six workers have already sought early redundancy and secured jobs elsewhere.
Mr Grills said a site audit of workers has seen five employees have their wages upgraded, with back pay applied and their termination payment subsequently adjusted, after the audit revealed they were being underpaid based on their skills and responsibilities.
“In that respect, Carter Holt Harvey has been very fair,” Mr Grills said. “They have gone above and beyond in some ways.”
It’s understood Carter Holt Harvey did attempt to sell the business as an ongoing concern, but was unable to find a buyer. There is some interest in the assets at the site from at least one company, Mr Grills said.
Mr Grills said the machinery on the operating lines at the mill were in many cases decades old.
“There’s some areas of the site that are so worn down, it’s not viable to keep it going,” Mr Grills said.
“There’s only so much maintenance you can do on an old machine, and that’s no doubt one of the reasons why it’s been difficult for the company to sell the business as an ongoing concern.
“If Carter Holt Harvey can’t make the operation viable out of 30-year-old equipment, no one else can either.
“They’ve probably kept it going longer than a lot of other companies would have.”
Carter Holt has owned the mill for the past 18 years, buying the plant from CSR.
In 2008, Carter Holt bought the other two Tumut mills from Weyerhaeuser – the adjacent sawmill and the nearby Gilmore factory.
Last September, it announced it had sold the sawmill and Gilmore plant to AKD Softwoods, as part of the company’s sell-off of various timber assets in Australia.
But the particle board operation remained in Carter Holt’s hands.
The company last week announced its pinepanels plant in Gympie would close by mid-April, putting 60 people out of work.
In December, the company signaled it would close its timber mill in the small South Australian town of Nangwarry, laying off 26 people.
Carter Holt has also sold off a number of other operations, including at Mt Gambier.
Mr Grills said during discussions Carter Holt had denied it was looking to exit Australia.
“Since then, they’ve signalled they would shut down three mills,” Mr Grills said.
Mr Grills said the only upshot of the closure in Tumut was that employees would walk away with their full entitlements, which had been hard-earned over decades of negotiations.
“Every time we’ve negotiated an agreement, we’ve built on the conditions that were in place,” Mr Grills said.
“When there’s been a transition of the business, we’ve been able to roll over entitlements as continued service.
“The union’s intention has always been to get the best outcome for workers.
“It doesn’t replace a job, but it’s some comfort to the employees that they will walk away with more than they would have under the provisions of the NES.”