Telco e-Bulletin 2013 # 2

1. More job cuts at Optus as company revenues decline.
2. Sensis cuts staff numbers, sends jobs off-shore.
3. FWA to hear Telstra tester dispute.
4. CWU questions safety of new CAN sealent.
5. Rest breaks in Service Delivery centres.
6. Telstra: lack of exchange maintenance poses health and safety risks.
7. Skill shortages, low wage and contract rates slowing NBN roll-out says CWU.
8. Canadian pension fund set to buy Nextgen.
9. Fair Work Ombudsman cracks down on underpayment and mistreatment of migrant workers

1. More job cuts at Optus as company revenues decline

Optus has confirmed plans to shed more jobs as it continues the process of reorganisation begun last year.

The company has not yet indicated how many jobs will go other than to suggest the losses will not be on the scale of those last year. During 2012, Optus cut nearly a 1,000 jobs - 10% of total - the greater part of them following the regional restructure of SingTel operations in the first half of the year.

The cuts reflect some further rationalisations on a regional level as well a changes to Optus' domestic marketing operations, designed to lift the company's profile and position it more strongly in the fixed line market as the NBN is rolled out.

The fixed line area has always been the poor cousin to Optus' mobile business. Optus continues to derive the greater part of its revenues - some 65% - from mobiles, but is under pressure in this market, with revenues over the 12 months to December 2012 falling by 7% and with customer growth failing to match that of its major competitor, Telstra.

Fixed network revenues have also declined, in this case by 3%.

Optus has long argued that the main obstacle to its greater success in the fixed line market was the presence of Telstra and has supported structural separation of the company and creation of the NBN as a way of creating a "level playing field" in telecommunications. Given the slow rate of progress of the NBN project, however, it seems unlikely that it will provide a basis for any sudden turnaround for Optus in this area.

Meanwhile, Optus is relying on cost-cutting to improve its earnings in what it predicts will continue to be a low growth environment.

This is not good news for Optus employees. Any CWU members or other Optus employees facing loss of employment should contact the relevant CWU state branch for advice.

2. Sensis cuts staff numbers, sends jobs off-shore

In yet another round of labour cost-cutting, Telstra's fully-owned subsidiary Sensis is proposing to reduce staff numbers by some 17% and send a range of functions off-shore.

The Sensis advertising and search business, centred on Yellow Pages, has been under pressure from the shift to on-line forms of advertising and from competition in this space. Despite attempts to "grow" this area of business, Sensis revenues have been in decline for several years, falling by just over 16% in the last financial year.

The latest reorganisation proposal will see the net loss of 648 jobs, with 698 roles being made redundant and 50 new jobs being created in a new Customer Management Centre.

A range of customer support functions will be outsourced to "industry partners", the standard code-word for overseas companies.

The CWU understands that this off-shoring accounts for about half the job losses. Further reductions will come about through rationalisation of management structures.

The off-shoring of Australian jobs to lower wage countries continues to be a matter of deep concern for the CWU and the union movement as a whole.

The union believes that it is an issue which is also of concern to the broad community and which the federal Labor government should address as it prepares its policies for the coming federal election.

3. FWA to hear Telstra tester dispute

The dispute with Telstra over tester banding levels is set to go before Fair Work Australia after discussions between the company and the CWU failed to resolve the issue.

As reported in E-bulletin 1, the CWU has been in dispute with Telstra over the question of grading of testers transferring onto the new Enterprise Agreement from other employment instruments (i.e. AWAs).

Testers who the CWU believes should, under the Workstream classification system, be placed (and paid) at Band 7 level are being deemed to be Band 5s.

The issue is part of a wider move by Telstra to reorganise and reallocate tester functions in line with managements' evident view that much, if not all, testing can be regarded as "simplex" work and consequently banded (and paid) at a lower rate.

In effect, Telstra is claiming that the testing function has changed sufficiently to warrant considering it - or parts of it - as a new role. The CWU rejects this view which clearly opens the door to a downgrading of the job.

The matter will now be heard by Commissioner Bissett on 14 March. Members will be kept informed of progress in the case.

4. CWU questions safety of new CAN sealant

A recent demonstration of a new product for use in the Customer Access Network (CAN) has failed to allay the CWU's concerns about its safe use.

The product, Dexbond, is in use in a number of countries for anchoring both copper and fibre cables into (plastic) joint enclosures and is evidently intended by Telstra to replace the 2 part epoxy packs which have been in use for some decades.

However it contains potential carcinogens in the form of isocynates so its possible introduction into the CAN raises serious health and safety issues for both Telstra employees and any contractors working on the network.

The CWU has sought further information from Telstra about the materials contained in the product and about any testing or investigation of it that the company has carried out to date.

Following the demonstration of its use earlier this month the union has also raised concerns about

• the methods of installation that will be used,
• the storage and safe handling of any waste material and
• the personal protections and training that will be required for staff (and contractors) using Dexbond.

The fact is that in the past several "innovative" materials introduced into the telecommunications workplace (PCBs in capacitors, asbestos, various chemicals) have been subsequently found to be carcinogenic. So in the CWU's view, caution is warranted in relation to Dexbond and proposals to use it should be subject to rigorous scrutiny.

Members should be aware that there is currently no agreement between Telstra and the CWU for the use of Dexbond in the field. Discussions are continuing and members will be kept informed of developments.

5. Rest breaks in Service Delivery centres

The CWU is continuing to pursue the issue of changes to rest breaks in the Perth and Townsville Customer Service Centres.

As advised in E-bulletin #1, the union made representations to Telstra on this issue earlier this month, arguing that sufficient consultation on the changes had not occurred and that a proper assessment of health and safety risks associated with the changes had not been made.

The CWU proposed that a joint Telstra/union working party should be established to review the decision with a particular focus on the health and safety issues involved.

Telstra has now rejected the CWU's proposal saying that

• any employee currently experiencing health problems that "medically require additional breaks" will be given them and that
• call handling times and numbers of calls in the centres have changed over the years to such a degree that the former breaks are no longer warranted and that
• other employees working with fewer breaks have not reported any health problems.

The CWU does not consider that this ends the matter. To state the obvious it is not current health problems but potential ones that are the core issue - though any current health problems among staff that can reasonably be attributed to working conditions are of course relevant.

Nor has Telstra presented any solid evidence, based on a thorough assessment of risk, that working conditions have changed sufficiently to justify cutting back on breaks.

The CWU is now seeking input from members about overall working conditions in the affected centres and in any other areas where intensive call handling is performed. Members are strongly encouraged to contact their state branches on this matter.

6. Telstra: poor exchange maintenance poses health and safety risks

The CWU has recently received information suggesting that the Manuka exchange in Canberra poses a significant health and safety risk to anyone entering it.

According to first-hand reports, the exchange building is in a state of serious disrepair and poses a number of risks. The most serious, however, comes from the broken floor tiling. At the time the exchange was built such tiles commonly contained asbestos.

Any number of Telstra employees and contractors may have been exposed to this potentially lethal substance as they have come and gone from the building.

The CWU has alerted Telstra to the problems at this particular site. However, the issue extends to hundreds if not thousands of now unmanned exchanges across the country many of which have been allowed to deteriorate as a result of cut-backs to the maintenance budget.

The recent fire at the Warnambool exchange in Victoria has highlighted the issue of exchange maintenance and safety. In the CWU's view, it is one that should not be dealt with in a piecemeal fashion.

Now is the time for Telstra to address the problem systematically through a thorough audit of the condition of unmanned exchange buildings and through investment in a maintenance regime which meets the OHS requirements of all those required to enter them.

7. Skill shortages, low wage and contract rates slowing NBN roll-out says CWU

The prospect of low wages and sub-contractor rates is contributing to skill shortages on the NBN project, according to CWU officials.

NBN Co recently acknowledged that the roll-out was well behind schedule, particularly in western and southern Australia where there are still no actual connections to the network. At Senate Estimates hearing earlier this month, NBN Co CEO Mike Quigley pointed to problems with prime contractor Syntheo as the reason for the slow progress.

What problems?

CWU South Australian president Steve Butterworth says that on many of the roll-out sites in South Australia and the Northern Territory workers with inadequate training are being used because they can be engaged at low rates.

At the same time more skilled and experienced workers are walking away from the project because of unrealistic contract prices.

And in some skill areas - most notably network design - there are not enough skilled workers to be had at any price.

The CWU has been warning of these problems since the project's inception - in fact from the time of the initial Fibre to the Node proposal in 2008 when the union argued that companies tendering for the project should:

• specify how they intend to meet the skills requirements involved in building, maintaining and operating the proposed .. network;
• identify any areas where they anticipate skill shortages in relation to any of these functions and
• outline what measures they intend to take to address such shortages.

Five years on the industry, taken collectively, has still not provided answers to these questions.

The NBN's current labour problems reflect, in part, the economics of the project itself which it increasingly appears do not reflect realistic labour costs. But they are also the product of the longer term decline in investment in skills by the industry.

It is not acceptable that telecommunications workers, whether employees or contractors, now be asked to pay the price for these failures.

8. Canadian pension fund set to buy Nextgen

Canadian pension fund, Ontario Teachers' Pension Plan, is in discussions with Leighton Holdings about the sale of Leighton's telecommunications assets, including fibre wholesaler Nextgen.

Other assets in the Leighton portfolio include its data centre operation, Metronode, and its cloud computing business, Infloplex. Altogether the company says it plans to sell a 70% stake in its telecoms assets which are valued at $885 million.

The fund has emerged as the winning bidder in the NextGen sell down which had also attracted interest from TPG and Hong Kong- based PCCW.

If the sale to the Ontario fund is finalised it will become the second Canadian pension fund to acquire telco assets in Australia in recent years. In 2009 the Canadian Pension Plan Investment Board bought Broadcast Australia, the owner of the former National Transmission Network which had been privatised in 2002.

9. Fair Work Ombudsman cracks down on underpayment in call centre

The operators of a call centre in Nowra, New South Wales, have been fined $107,500 and ordered to back-pay staff almost $200,000.

Federal Magistrate Rolf Driver found 33 staff were underpaid a total of $193,419 in 2009. The largest individual underpayment was $17,467.

The case is one of a number recently brought by the Fair Work Ombudsman as part of a crackdown on underpayments and mistreatment of workers.

Quincolli, which formerly operated the Nowra call centre for several NSW municipal councils and other organisations, has been fined $81,000. The operator of the centre, Judith Potter, was personally hit with multiple fines.

The employees were underpaid minimum hourly rates, overtime rates, annual leave loadings and shift, weekend and public holiday allowances. Magistrate Driver said Potter failed to provide basic and important entitlements under workplace relations legislation and the breaches needed to be taken seriously.

Meanwhile the Ombudsman has also targeted a number of Sydney restaurants for underpayments of migrant workers and other breaches.

Some 21 restaurants were audited recently and four of them were issued with spot fines of $550 for breaches such as failing to give staff proper payslips.

Ombudsman Nicholas Wilson said that underpayment of migrant workers in the hospitality industry was common. Recently arrived workers were often not aware of their working rights and could also be reluctant to complain.

The Fair Work Ombudsman's office says it will be continuing to target industries where the use of casual labour is most common and those most prone to using students and migrant workers.