Outsourcing: Court decision spells bad news for workers

by Peter Mac

The Federal Court last week effectively decided in favour of Australia's 
employers when it found that Telstra Australia had the right to transfer 
work to outsourcing firms who are willing to work at cut rates. The Court 
declared that the transfer of Telstra's call centre work to the Stellar 
Call centres, a joint organisation of Telstra and the US-based firm Excell, 
was justified under current legislation.

The decision would allow Telstra to retrench its 12,000 call centre staff, 
who currently earn about $35,000 p.a. for a 38-hour week, and to direct the 
work to staff employed by Stellar, who earn some $28,000 p.a. for a 40 hour 
week.

The decision is a blow to centralised wage fixing. It has mass implications 
for Australian working people, as it could set a precedent for workers in a 
wide range of employment, including banking, cleaning, telecommunications 
and many other service industries.

The court's decision overturned an earlier decision that the work performed 
by Stellar employees was essentially the same as that of Telstra call 
centre employees, and that the work itself was an essential part of 
Telstra's commercial operations.

Following an appeal by Telstra, the Federal Court ruled that the work was 
not an essential part of Telstra's commercial operations, and that Stellar 
was not therefore obliged to offer its workers the same conditions as 
Telstra.

The Federal Government strongly backed Telstra's case, as it supported the 
Government's view that wage agreements should not be replicated when work 
was transferred from one company to another.

The tactic of transferring work to an associated company is similar to that 
of transferring the employment of workers from the stevedoring firm 
Patrick's, which led to the bitterly-contested industrial and community 
struggle three years ago, and the final victory of workers led by the 
Maritime Union of Australia.

The Secretary of the communications section of the Community and Public 
Sector Union, Mr Adrian O'Connell, has condemned the decision, which he 
says will lead to the closure of the Telstra call centres, and to other 
firms using outsourcing as a means to cut wages.

It is expected that the union will not at this stage mount a further legal 
challenge to the decision, but will rely on a Labor Government coming to 
power at the next federal elections and passing legislation to protect 
workers affected by employers' outsourcing decisions.