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Telco e-Bulletin 2013 # 11

  1. CWU meets with Telstra on Project Rubiks.
  2. CWU queries Telstra on new superannuation arrangements.
  3. Optus offshores IT positions.
  4. Court rejects CWU's Excelior appeal.
  5. TPG bidder for Optus satellites.
  6. Service Stream trading halt extended.
  7. Telstra moves to tighten asbestos handling requirements.
  8. Labor gets last minute workplace legislation through parliament.
  9. IBM ups use of 457 visas.

1. CWU meets with Telstra on Project Rubiks

The CWU has met with Telstra to discuss concerns about the development of new "local" job descriptions (JDs) in the Network Construction area.

Telstra has recently been examining the actual work being performed in areas of Network Construction with a view, it says, to seeing whether current classification structures reflect what is actually going on in the field.

The immediate focus of the exercise is fibre splicing. Telstra is training additional staff in this function and the question is where they will then sit in the Workstream structure.

The CWU has reminded Telstra that under the current Enterprise Agreement (EA) fibre splicing is at least a Level 5 and possibly a Level 7 function, depending on the particular nature of the work being performed. Any members currently doing such work and graded at a lower level should be upgraded.

We have also pointed out that under the EA there is no scope for the unilateral development of new "local" job descriptions. If there is a need for new JDs they are to be developed through consultation with the CWU.

Telstra has now undertaken to consider the classification level of the particular employees who have been identified by the union as needing upgrades. State branches will be submitting the names of members who are potentially in line for an upgrade to Telstra.

If you are in such a position and have not yet contacted your state union office you should do so immediately.

2. CWU queries Telstra on new superannuation arrangements

The CWU is seeking clarification from Telstra on proposed new arrangements for employees on Defined Benefit superannuation schemes.

The Telstra Enterprise Agreement (TEA) negotiated last year sets out a timetable for boosting employer superannuation payments up to the new levels set by the federal Labor government.

By law, employer contributions are to move from 9% to 12% between now and 2020. Under the TEA the first 0.25% will be paid from 1 July 2013.

Some Telstra employees, including those on Defined Benefit super under the old Commonwealth Superannuation Scheme (CSS), already effectively receive more than 9% in employer contributions. This is due in part to the fact that they still receive the 3% productivity component granted to large sections of the workforce under the Structural Efficiency decision of 1989.

Telstra has now informed employees covered by the CSS that this 3% contribution will be reduced to 2.75% to offset the additional 0.25% contribution due under the EA. The 0.25% will then be added to the employer contribution to bring the total to a (notional) 9.25% level in line with that being paid to those on the accumulation scheme.

The CWU has queried this decision and has sought discussions with Telstra on the issue as a matter of urgency.

The CWU will advise members of further developments.

3. Optus offshores IT positions

Optus has advised the CWU that 19 IT positions will be sent offshore as part of the ongoing company restructure begun last year.

During 2010 the company shed nearly 1000 jobs. Further cuts were flagged in February this year. The 19 positions are part of that phase of the restructure.

Optus has a number of distinct IT groups but the current redundancies are all from within the Portals and Enterprise Integration (PEI) group. Part of the work performed by the Enterprise Application Integration team within PEI is to be transferred to an "industry partner", MSAT Mahindra Satyam the Indian IT outsourcing giant.

Mahindra Satyam has recently boosted its presence in Australia with the expansion of its Sydney office last year and the subsequent appointment of former Telstra and Optus executive Ted Pretty to the role of chairman of its Australia/New Zealand operations. Both Optus and Vodafone are clients.

The CWU continues to be concerned at the flow of skilled Information and Communications Technology (ICT) jobs out of Australia -both on behalf of affected employees and from a broader workforce development point of view.

Australia is currently experiencing skill shortages in sections of the ICT workforce. There is some reason to believe that the perceived insecurity of ICT employment is part of the problem. Why bother training in ICT today if your job is going to be sent offshore tomorrow?

The union believes that the creation of a skilled and secure ICT local workforce is essential to Australia's prosperity, particularly as the mining boom ebbs. Off-shoring decisions such as those we continue to see from our major telcos directly undermine this goal.

4. Court rejects CWU's Excelior appeal

The Federal Court has rejected the CWU's appeal against a 2012 decision about the entitlements of telecommunications trainees.

Last year the Federal Magistrates Court found that Telstra trainees employed by training company Excelior were not entitled to Travel Allowance or Excess Travelling time payments under the terms of the Telecommunications Services Award. The union determined to appeal the decision in the Federal Court.

The Court's decision was handed down late on Friday 28 June as the E-bulletin went to press. It represents a setback for our members and potentially for many other trainees, not only those in the telecommunications sector.

The CEPU as a whole supported the appeal and will now determine what further steps can be taken to address what is an obvious injustice in the treatment of young workers. The E-bulletin will report further on the details and implications of the decision in its next issue.

5. TPG bidder for Optus satellites

Private equity company TPG has emerged as one of a number of bidders for Optus' satellites.

Despite statements by Optus that it has not yet decided whether or not to sell its satellite assets, a bidding process for the business is already underway.

According to the Australian Financial Review, TPG has participated in two rounds of the first stage of bidding along with other private equity companies and Canadian pension funds.

TPG has been on the acquisition trail for several years. In 2010 it acquired the fibre backhaul assets of Pipe networks. And in May it surprised industry observers when it emerged as a buyer of 2.5GHz spectrum in the "Digital Dividend" auctions. The company indicated that it was considering using the spectrum to add to its suite of wireless broadband services which currently are based on resale of Optus mobile services.

The Optus satellite business would add another major string to TPG's bow. It remains to be seen, however, whether these assets can be melded successfully into an operation capable of challenging the major players - Telstra and Optus - in a tightly competitive market.

6. Service Stream trading halt extended

NBN Co contractor Service Stream has been granted a further trading halt until 8 July. The two week extension will mean that the company's shares will have been suspended from trading for a month.

As reported in E-bulletin 11, Service Stream requested the halt earlier this month to address problems in its fixed network business including Syntheo, its joint venture with Lend Lease. The venture won NBN volume roll-out contracts for SA, WA and NT but relinquished the last of these earlier this year when it became apparent it was struggling to meet roll-out targets.

Service Stream's difficulties have multiplied since that time, with CEO Grahame Sumner resigning in late April. He is yet to be replaced.

7. Telstra moves to tighten asbestos handling requirements

Telstra has announced a series of measures designed to improve asbestos awareness and management for those working on its NBN-related network remediation programme.

Under its agreements with the government and NBN Co, Telstra is responsible for ensuring that its pits and ducts are "fit for purpose" before they receive NBN Co fibre. Telstra has contracted this work out to three prime contractors, Visionstream, Service Stream and Silcar - the same companies which, with the addition of Transfield, are undertaking the volume roll-out work for NBN Co.

These companies in turn contract out their work - both remediation and roll-out - to sub-contractors, often small to medium local operators who may engage employees -or more sub-contractors - to do the actual work. It is these workers at the bottom of the pyramid who are most at risk of exposure from asbestos.

The measures Telstra has now announced aim to improve safety across this contracting and sub-contracting system by boosting the supervision and training procedures of its three prime contractors:

  • Strengthening field supervision staffing and overseeing of subcontractor staff.
  • Addressing gaps in induction procedures for new staff.
  • Disclosing subcontractor procedures to Telstra to ensure safe asbestos handling and removal can occur.
  • Ensuring all contractor and subcontractor staff complete mandatory training in asbestos management.
  • Working with Telstra to reinforce the required standards for subcontractors' field team supplies, ensuring all field staff carry adequate supplies for safe asbestos handling.

The CWU welcomes these measures. In the end, however, it must be remembered that they do not represent the end of Telstra's responsibilities in this matter.

As the E-bulletin has noted before, Telstra as the owner of the "workplace" in which the asbestos is located has a clear legal obligation to protect both worker and public safety during the remediation programme. Unlike so much else, this obligation cannot be contracted out.

Given this, it must be asked whether a work model based on the use of directly employed staff by Telstra or-in the present moment - its prime contractors might not offer better protections to both Telstra and those working on the NBN project than does the current sub-contracting pyramid.

8. Labor gets last minute workplace legislation through parliament

The federal Labor government has succeeded in getting important legislation through the parliament prior to the end of what is expected to be its final sitting before the next election.

Although the new Prime Minister, Kevin Rudd, has yet to announce the date of the federal election it is unlikely that parliament will resume before that occurs. So the passing of amendments to the Fair Work Act and legislation designed to tighten the use of 457 visas represents a last minute win for the labour movement.

The amendments to the Fair Work Act include clauses which:

  • enable employees who believe they have been bullied at work to apply to the FWC for an order to stop it, and requiring the tribunal to begin dealing with the matter within 14 days;
  • extend the right to request flexible working arrangements to a wider range of circumstances and setting out a "non-exhaustive list" of "reasonable business grounds" to refuse requests;
  • require "genuine consultation" with employees about changes to rosters or working hours;
  • increase concurrent unpaid parental leave from three weeks to eight weeks;
  • permit, when agreement can't be reached, the default use of workplace lunchrooms for union discussions with employees;

As reported in E-bulletin #10, a number of these amendments came under threat when key independents Rob Oakshott and Tony Windsor said they would not support any changes that were not also supported by the Opposition.

In the end, however, Labor was able to secure sufficient support to get its legislation through Parliament with only minor changes.

Separate legislation to require labour market testing by employers wanting to use 457 visa workers (also reported on in E-bulletin #10) has been passed unamended.

9. IBM ups use of 457 visas

Recent moves by IBM Australia to increase its use of 457 visas show why Labor's new market testing laws are necessary.

IBM is in the middle of a global cost cutting drive which is expected to lead to a loss of anything up to 1500 jobs in Australia. But at the same time they are reportedly ramping up the use of 457 visas.

According to reports in The Australian IBM can achieve cost savings of up to 40% by the use of 457 visa employees.

So how can this be, given that under the 457 scheme, visa holders are supposed to be employed at the going market rate in Australia?

The Australian does not explain this puzzle but as E-bulletin readers will know Australian companies have found a number of ways of achieving such results. One obvious one is simply to employ the new workers at lower classification levels than their former local counterparts.

Another is to train the temporary visa holders in the local work and then send them back to their country or origin to perform it. Telstra and Australia's big banks have been involved in such strategies.

The new labour market testing laws are designed to put a brake on such activity by requiring employers to demonstrate they have tried to fill vacancies with local employees before applying for 457 workers.

They will not work, of course, unless they are backed up with auditing and inspection procedures. But they will be welcomed by all who recognise that there is a difference between genuine skill shortages and scams designed to lower the wages and conditions of all workers.

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