Double blow for Telstra’s IR strategy
September 10, 2008
Telstra should now resume genuine negotiations after a groundbreaking win by unions in the Australian Industrial Relations Commission.
Senior Deputy President Lacy this week ruled in favour of unions who have asked the Commission to help resolve the dispute with Telstra.
In his decision on Tuesday, SDP Lacy agreed with the unions’ position that Telstra management has not been bargaining in good faith.
He said that a “fair reading of the documentation” indicated that:
Telstra’s strategy from the outset was to make it appear that it was prepared to negotiate an agreement with the unions but without any real intention to do so . . . Telstra intended negotiations to proceed to a particular point in time before diverging on another course.
When the unions sought mediation of the dispute in the Industrial Relations Commission, Telstra sought to block the Commission by arguing that the current agreement only allows the Commission to mediate if an employer gives its consent.
Telstra also chose to make its case by letter to the Commission and did not attend the first hearing before SDP Lacy.
However, Lacy SDP found that the disputes clause in the agreement gives the Commission the power to intervene and act as a “circuit breaker in the event of the intransigence of one party” - that is “where one party to the dispute exhibits a clear intention to withhold agreement to mediation”.
Unions have been seeking to negotiate a replacement agreement to the current Telstra workplace agreement, in accordance with the renegotiation clause contained in the existing agreement.
However, to date Telstra has refused to bargain in good faith with the unions, and has instead offered a non-union deal.
This decision vindicates the unions’ position and is critical of Telstra’s industrial relations strategy.
The ACTU and unions have always been ready to resume negotiations with Telstra after management unilaterally broke off negotiations in July.
We sought the assistance of the Commission in the face of Telstra’s intransigence to entering into good faith bargaining.
The decision upholds the unions’ argument that the Commission could play a role in resolving this dispute.
Telstra should now accept the umpire’s decision and resume genuine negotiations with unions.
The Commission will convene a further hearing to decide whether to oversee a secret ballot of Telstra employees about whether they would prefer a union-negotiated collective agreement or a non-union deal, as the company is insisting.
Offer does not meet “spirit or letter” of government policy
The decision in the Commission is the second blow to Telstra’s industrial relations strategy in the past week.
Management has also fallen foul of Deputy Prime Minister Julia Gillard over its plans to pursue non-union job contracts with its workforce.
In a letter to the ACTU, Ms Gillard in her role as Workplace Relations Minister has said that elements of the offer made to Wholesale and Service Advantage (Call Centric) employees does not meet the spirit or the letter of the Rudd Government’s industrial relations policy.
Ms Gillard’s advice also has implications for other companies seeking to roll out non-union collective agreements that mimic Australian Workplace Agreements.
This comes as Telstra management is in panic mode about its strategy. The company’s chief lobbyist in Canberra, Craig Middleton, emailed all government MPs last week seeking to assure them its industrial relations approach was all above board.
But as the letter from Ms Gillard points out, Telstra HR is out-of-step with the post-Work Choices future of Australian industrial relations, which will ensure good faith bargaining between employees and employers.
As the Deputy Prime Minister states, redundancy entitlements and salary increases for new employees would be significantly lower in the proposed agreement.
Ms Gillard’s advice confirms that Telstra is seeking to reduce terms and conditions for new employees on a take-it-or-leave-it basis.
Acting on advice from and analysis by the Department of Education, Employment and Workplace Relations, Ms Gillard has found fault with two key sections of the offer.
Background
The proposed deal would split the workforce into two groups: Part A for current employees and Part B for new employees and those on expired Australian Workplace Agreements.
Unions believe there are legitimate questions about whether the pay rise offered under Part A would meet basic cost of living increases given the Reserve Bank’s inflation forecast for this year of 5%.
Part B would effectively create second class employees by reducing conditions in some significant areas, such as hours of work, redundancy entitlements for new employees, and no guaranteed wage increases.
For all Part B employees (including up to 21,000 whose AWAs expire over the next five years):
- There will be no guaranteed annual pay rises.
- Paid overtime will not be available to anyone earning over $52,000 a year.
- Hours of work will be averaged over 12 months, rather than a fixed 36.75 hours every week.
Additionally, for new employees:
- Redundancy entitlements will be cut from four to three weeks per year of service.
- Redundancy pay will be capped at 50 weeks, compared to 80 weeks now.
The Government’s conclusion
Crucially, Ms Gillard said that the two-part structure of the offer
. . . could lead to a harsh and oppressive result for the minority group [Part B employees].This would be contrary to the Forward with Fairness policy that parties should be required to bargain in good faith.
Ms Gillard also raises concerns about the removal of any reference to union consultation when a redundancy decision is made by Telstra.
Ms Gillard concludes:
The specific proposals relating to the redundancy entitlements and salary increases for two different groups and the consultation during redundancy do not meet either the spirit or the letter of Labor’s Forward with Fairness policy.
Leaked internal HR documents have revealed that the offer being made to Wholesale and Service Advantage staff is a template for a non-negotiated agreement that Telstra plans to roll out across the company.
Telstra management would do well to heed Ms Gillard’s advice, ditch its flawed strategy, and return to the negotiating table with employees’ union representatives.
–
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* Share your questions and concerns with us: Telstra@actu.asn.au or call our workers’ helpline on 1300 362 223
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5 Responses to “Double blow for Telstra’s IR strategy”
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There is justice after all!
Hopefully now Telstra will sack its HR head for telling “whoppers” and return to meaningful negotiations. Hopefully also we may resolve this dispute without an ugly industrial action which can only lead to a lose-lose situation and damage Telstra employees’ reputation with the general public. Telstra employees are always there to help and do over and above what’s required in any disaster situation but the public quickly forget, especially when their services are affected and all for the sake of a pay rise for telstra workers.
once again the rhetoric sees Telstra in a morally weak position, however unless legally compelled to collectively bargain i doubt there will be any changes to the direction. I would think that Telstra’s claims of not being able to trust the Staff’s nominated representatives at the bargaining table have been proven to be complete misrepresentations and in fact it is clear that the untrustworhy party is in fact the Telstra representatives. I hope my Wholesale and Service Advantage colleagues see through the facade and reprimand Telstra with a strong NO vote.
haha… This rubbish will not fly Telstra, but you may Sol. On a flight back home.
Nice result. but now what…?
Telstra need to employ a law firm that understands the law as they are working on bad legal advice. I think I know what the problem is, management don’t appear to be embracing change very well. They have a dinasour type of culture, and have enormous behavioural problems.
One could be forgiven for thinking that they are a collection of corporate phsychopaths!