CWU T&S FACT SHEET
Index to Fact Sheets
Updated 21 Feb 2021
TELSTRA SUBSIDIARIES - SERIES
TELSTRA PURPLE CLARIFICATIONS
We sought and had a meeting with Telstra this week to ask a number of questions. There has been significant confusion because of the mixed messages from Telstra. Here is a summary of our understanding of the position.
1. There are 2 "Purples".
2. There is Telstra Purple Pty Ltd - a subsidiary of Telstra Pty Ltd.
3. There is a business unit within Telstra itself called "Purple" (Purple People).
4. Telstra Purple Pty Ltd has been largely (90-95% of the staff) created by two acquisitions.
5. The acquisitions were Readify Pty Ltd and Kloud Pty Ltd -IT consulting -work.
6. The staff of Telstra Purple Pty Ltd are software developers and engineers.
7. Their average tenure is 3 years.
8. Their salary is set by employment contracts, not the new EBA.
9. No staff from Telstra were moved to Telstra Purple Pty Ltd.
10. No staff from Telstra are expected to be transferred to Telstra Purple Pty Ltd
11. Telstra staff in the Purple business units will largely transfer to ServeCo later this year.
12. We assume some may Transfer to InfraCo later this year
TELSTRA PURPLE SUMMARY
Telstra employees will not transfer to Telstra Purple Pty Ltd. Therefore you will be part of the major move expected at the end of this year when most staff are transferred to InfraCo or ServeCo. We are doing a series of items on the transfer issues.
QUESTIONS - WE CAN ANSWER MOST
We receive a number of questions - I am trying to answer these with our series of bulletin items - but here some questions:
1. When Telstra splits into 3 Companies by the end of the year is it true that we will have to resign from Telstra and apply to join these new companies?
No. Technically Telstra terminates you as you are redundant. Then they find suitable alternate employment and transfer you to a new employer (InfraCo). Note Telstra will not split - it is creating 3 subsidiaries and transferring most staff to them.
2. If we do not resign from Telstra will we be able to take a redundancy?
If there is no suitable alternative employment Telstra must pay redundancy
3. If we choose not to move to the new Company will we be dismissed without redundancy entitlements?
4. If we move to the new Company will our leave and redundancy entitlements be transferred or will we lose the redundancy entitlements and be paid out annual leave and long service leave?
Yes they will transfer but it is complex - I will do more in the bulletins on this
5. Where did the Purple EBA originate from?
See the above clarification article
6. How does the purple EBA affect us Telstra workers?
It appears now that it will have no effect. It may point to the pathway Telstra will use with InfraCo and ServeCo.
7. Is Telstra Purple treated like a subsidiary company now (or soon)? Aren't they under Telstra EBA? Can Telstra just change the EBA before it's expired?
Telstra purple within Telstra is not a subsidiary. See the clarification above.
8 When does the Telstra Purple EBA come into effect?
It was certified and came into effect last week.
9 How long before the "new" Telstra EBA comes into play and the old one expires - towards the end of the year.
The Telstra EBA has a nominal expiry date of 30 Sept 2021. It will remain in force until replaced. Negotiations for a new EBA will commence soon.
INFRACO & SUBSIDIARIES - RECAP
Recap - When you move to a subsidiary of Telstra, your employment ceases with Telstra. You become a new employee of the subsidiary. The first consideration is the transition plan. Several are relevant. The first is Transfer of Business. We will deal with these issues in several articles.
INFRACO & SUBSIDIARIES - TRANSFER OF BUSINESS
There are provisions in the Fair Work Act that cover the transfer of business. These are mandatory and will apply to you.
A transfer of business occurs when the business or part of a business if transferred from one employer to another. We will not consider the details. We take it as agreed that the movement of staff from Telstra to a subsidiary fulfils the definition of a transfer of business as defined in the FW Act.
The Fundamental Position:
When you move from one employer to another (Telstra to a subsidiary), then most of your conditions will continue to apply (for a certain time - see later). In your case if you are moved to InfraCo Pty Ltd or ServeCo Pty Ltd, then you will take the Telstra Award and the Telstra EBA conditions with you. So far so good. (This is not Clause 47 in operation but the FW Act)
For How Long?
You will keep your Telstra EBA terms and conditions until a new EBA is done in InfraCo or ServeCo. When a new EBA is done in InfraCo or ServeCo, then your terms and conditions under the Telstra EBA cease, and you are then bound by the terms and conditions under the new InfraCo or ServeCo EBA.
When will there be a new EBA in InfraCo or ServeCo?
A new EBA (after your transfer) in the subsidiary could be several years away. Our guess is that Telstra is expected to do an EBA in the subsidiaries before you transfer over. That way they may be able to persuade a few new employees in the subsidiaries to vote up a poor EBA that will apply to you. It will be in force for several years. As you will not be transferred to the subsidiary by then, you will not get the opportunity to vote. This is the standard way some unscrupulous employers get poor EBAs certified. As we stated above, it is the EBA after you transfer that raises a concern.
Where is the problem?
We restate that it may not be a concern for several years. When a new EBA is certified after you transfer and if the terms and conditions under the new InfraCo or ServeCo EBA are inferior compared to the Telstra EBA (as we saw in Telstra Purple) then you lose. For example, if the new EBA has only a 12 week redundancy (as in Purple), then you will be stuck with a 12 week redundancy instead of the 80 week redundancy.
What about Clause 47?
It is argued that Clause 47 will now kick in and protect your Telstra conditions. There may also be other solutions. We need to discuss this further in later bulletins.
Can I refuse movement to a subsidiary?
Yes - but this is for a later bulletin item.
Should I get out now?
No, there is no reason to panic. We need to know a lot more and if we are an effective union, we can protect your back. Talk to friends - join the union - get bargaining power - it was always this way.
TELSTRA PURPLE - A SIGNPOST FOR INFRACO AND SERVECO?
An extract from Telstra chat line: (Darren Fewster)
Purple people are not covered by the Telstra Award or EA. Telstra Purple is a relatively new company that is largely made up of professionals in IT/software/data/cloud from different companies. Different Awards apply to them. And legislation like the State long service schemes applies to them (and always has) because the Telstra provisions in the Government Long Service Leave Act cannot apply - that's just the law. If some terms are different for Purple, so what?? They also have additional benefits relating to their industry and jobs (like tools/equipment for their specialist work).
The Purple terms are different - a 38 hour week, 12 week's redundancy, 10 days sick leave etc. Our national union did not campaign for a better EBA.
We need to campaign in ServeCo and InfraCo for Telstra conditions.
INFRACO & SUBSIDIARIES - RECAP
Recap - when you move to a subsidiary, of Telstra, your employment ceases with Telstra. You become a new employee of the subsidiary. What happens to accumulated benefits and conditions? We will deal with these issues in several articles.
INFRACO & SUBSIDIARIES - TRANSITION IN THEORY GENERALLY
There are several pathways to consider here so an understanding helps. Without transition paths, your move to a subsidiary involves two theoretical steps:
- Termination of employment with Telstra: You are technically redundant. Telstra would need to pay you out in accordance with the redundancy agreement. You would be paid out your accrued annual leave and long service leave. You are unemployed.
- Employment with the Subsidiary: After termination, you get a new job with a subsidiary. You are a new employee and so you have no annual leave, no LSL as you need to qualify again, no sick leave and so on. You have a new boss!
The above will not occur as transition rules exist to give you some protections.
INFRACO & SUBSIDIARIES - TRANSITION RULES
There are several matters to be considered when moving to a subsidiary. The key matters to consider are:
- The Fair Work Act contains provisions known as "Transfer of Business". These offer protections from unscrupulous employers. We will deal with each in following bulletins. We consider that the actions of Telstra fulfil the preconditions to attract these provisions. So we will not address the qualifying rules. Transfer of Business applies.
- Your employment contract: Whenever you join a new employer, you always have an employment contract. This is normally in the form of a long letter setting out your employment conditions. This will be a critical document when you move to a subsidiary.
- The Award and EBA applying to the new employer: The new employer may not have an EBA. These are your minimum conditions.
- Clause 45 of the Telstra EBA: This is an interesting clause and may guide the future. It will only assist current Telstra employees under the EBA. The AWA and ITEA employees will soon be EBA employees.
INFRACO & SUBSIDIARIES - TELSTRA SUPER
Just when we thought Super would not be an issue with subsidiaries, we have information that there might be a problem. A member asked about super and received the following response:
Question: With the changes with "our legal structure". How does this affect the Superannuation of staff on Defined Benefits?
Response from Fewster, Darren: We will work closely with Telstra Super to ensure ongoing access to Defined Benefits (DB) Superannuation. We have also set this out in the Telstra EA in terms of an offer to work with a subsidiary. If we cannot ensure you have ongoing DB membership, then you would be able to decline an offer to move to work with a subsidiary and instead be retrenched and receive redundancy benefits as set out in the EA. However, I am confident we will work this out with Telstra Super.
This appears to say that if you do not accept whatever is offered, Telstra will make you redundant. Sadly, some would say "Good". We will follow up.
31-01-21 INFRACO & SUBSIDIARIES - AWARD HISTORY - FIRST FWC CASE
(continued from last week)
As the Divisional Secretary, I made an application for Telstra to be bound by a special "enterprise award", not the industry Award.
Telstra strongly opposed our application and argued that you should be covered by the (industry) Telecommunications Modern Award. Several others attempted and failed to get an enterprise Award.
We eventually ran a case before the Full Bench of the FWC and won. The Full Bench held that we could create an enterprise Award. This was the first enterprise Award to be made so it was an important precedent.
But is was only the start.
Full Bench Decision.
31-01-21 INFRACO & SUBSIDIARIES - AWARD HISTORY - SECOND FWC CASE
While we won the right to have an enterprise Award, we could not agree on the content of the Award. We wanted the 36.75 hour week, the then 84 weeks redundancy etc. Telstra wanted the 38 hour week and 12 week redundancy, and effectively the industry Award content. The matter again went to a Full Bench of the FWC.
We won all the better conditions that existed in the former Telstra Awards and EBA - except the full redundancy.
The FB determined in private mediation 40 weeks as the maximum redundancy, plus the 4-5 week's notice on top of the 40 weeks.
We currently will have the best safety net Award in the land.
Full Bench Decision.
31-01-21 INFRACO & SUBSIDIARIES - BIG PICTURE #1
- We have heard about several Telstra subsidiaries, and there may be more:
- InfraCo Fixed,
- InfraCo Towers
- Telstra Purple
- It is expected that Telstra will be mostly emptied, by moving staff to subsidiaries this year.
- Telstra and the subsidiaries are separate legal entities and must be considered as separate companies and employers.
- If you are moved to a subsidiary, you should consider the legal effect to be:
- that you have been terminated by Telstra and
- that you have been employed as a new employee by the subsidiary.
- New employees start with no leave, no redundancy, no seniority etc
- Telstra subsidiaries will only have the Industry Awards as a safety net. That is a 38 hour week and 12 week's redundancy.(We wanted to challenge this in Telstra Purple but our Divisional Office has not taken up the challenge)
- Telstra is certain to put forward a new EBA for each subsidiary with a 38 hour week and 12 week's redundancy - as they did with Telstra Purple.
31-01-21 INFRACO & SUBSIDIARIES - BIG PICTURE #2
Now you can appreciate what we are trying to protect. There are some protections. They basically are:
A union with competent officials
Transfer of business laws and the limited protection they give
For Telstra employees, Clause 47 of the EBA which also may have limited effect.
Existing staff are protected for the immediate future, so do not panic.
While there are uncertainties, we can protect you if we are organised.
We will elaborate on these in future bulletins.
26-01-21 INFRACO AND OTHER SUBSIDIARIES
We expect the vast majority of Telstra employees will. be moved to a subsidiary this year. It would appear that to the hard won benefits of Telstra union members (eg 36.75 hour week and 80 week's redundancy) will disappear as no one will be left covered by the Telstra EBA.
Unless we do something!
The "Telstra Purple" strategy of Telstra concerns many members as the new "Purple" EBA has a 38 hour week and a Redundancy of 12 weeks (plus notice).
At one extreme, Telstra should be able to move every employee to a 38 hour week and redundancy of 12 weeks. (Plus a number of other lower benefits.
Clause 47 of the current EBA is supposed to save existing Telstra staff from these massive reductions in benefits.
We will have a series of items to explain the complex legal issues. This will be done over several weeks and we will put the full series on a special web page.
To understand it you need to follow the following explanations.
26-01-21 INFRACO & SUBSIDIARIES - YOUR CURRENT CONTRACT
At present a Telstra employee will have these 4 instruments containing your core employment rights:
Nation Employment Standards - NES
Telstra Modern Award - an "enterprise" Award
Telstra Enterprise Agreement 2019-2021 - EBA
Your letter of employment
An Award, read with the NES, contains your minimum conditions.
The BOOT test - The FWC compares your EBA with the Award and NES to make sure that you are Better Off Overall before certifying an EBA.
26-01-21 INFRACO & SUBSIDIARIES - THE INDUSTRY AWARD
Do not confuse the "Telstra Modern Award" with the "Telecommunications Industry Award". There is a Telecommunications Modern Award which covers the Telecom industry (Telstra is in that industry).
The Award has a 38 hour week, redundancy of 12 weeks and other lesser conditions compared to the Telstra Modern Award. More on that later.
26-01-21 INFRACO & SUBSIDIARIES - AWARD HISTORY
This will give you an insight into what Telstra wants.
The Fair Work Act in 2009 began an award overhaul to essentially reduce the large number of awards then in existence. The new thrust was industry Awards.
I was the Divisional Secretary of the Communications Division at the time so I fought the fight.
The FW Act provided for industry awards but allowed in exceptional circumstances "enterprise awards". Telstra was an enterprise. It took 2 Full Bench Cases to achieve the outcome. More next week
18-01-21 TELSTRA PURPLE - WHY IS IT IMPORTANT
Purple is an indication of what may happen to all staff in Telstra as Telstra sets up InfraCo and other subsidiaries this year.
18-01-21 HOW TO PROTECT YOUR BENEFITS
There is only one way - solidarity.
Talk to your colleagues. Understand the issues. Why would a new EBA threaten your benefits?
Stay informed with our bulletins and build a local information network.
And join our Union
18-01-21 INFRACO AND OTHER SUBSIDIARIES
We will in the next few weeks explain more fully the implications of Telstra Purple. It is not a simple story. We will explain the paths to the future. This will cover particularly:
Telstra EBA and Modern Award
The effect of the Telstra EBA and Modern Award on subsidiaries
Transfer of Business rules
The effect of a new EBA
Clause 45 in the current Telstra EBA.
18-01-21 TELSTRA PURPLE - WHAT IS IT
Telstra Purple has two identities - it is a Business Unit within Telstra and secondly a subsidiary of Telstra. We are not sure where it stands at present.
According to the Telstra Purple web page:
Telstra Purple is the largest Australian owned technology services business, bringing together Telstra Enterprise's business technology services capabilities and a number of its recently acquired companies, focused on outcome-based, transformative tech solutions.
We have more information on our web page:
Telstra Purple Background.
The EBA (yet to be certified) can also be found at that page.
18-01-21 TELSTRA PURPLE - WHAT IS HAPPENING
Purple is a subsidiary of Telstra. It is doing its first EBA.
Our members in Purple will have concerns seeing a basic EBA with absolute minimum standards. The significant ones include:
A 38 hour week
After 10 years redundancy is 12 weeks max (plus notice)
State (not Commonwealth) Long Service Leave (Vic is 2 months after 10 years)
VIP - CONTACTING US
Please note the following changes as we simplify our phone numbers
0428 942 878
Dan Dwyer Secretary/Lawyer - for industrial matters & advice
0447 365 433
Administrative eg payments, applications, change of details
Authorised by Dan Dwyer Branch Secretary
CWU Telecommunications & Services Branch, Sydney City, NSW.