Telstra freezes executive pay

update Telstra will freeze the remuneration of its executive-level staff at current levels as the result of its regular annual salary review.

David Thodey
(Credit: Suzanne Tindal/
ZDNet.com.au)

The telco's new chief executive David Thodey held meetings today to let staff know it was time for Telstra to be tightening its belt at all levels, including the executive level.

The freeze on executive pay was delivered as Telstra simultaneously told staff on Australian Workplace Agreements (AWA) they were in line for a pay increase of just 2 per cent this year, according to a briefing the telco gave staff today.

The new Enterprise Agreements replace AWAs which were outlawed by the Federal Government shortly after its election win. Telstra has at its disposal several employee contract options including Enterprise Agreements, non-union Enterprise Collective Agreements, and union-negotiated Enterprise Bargaining Agreements. Staff pay on recently signed ECAs would remain unchanged.

Telstra chief David Thodey in May flagged the telco would start negotiating a new Enterprise Agreement to replace contracts for staff on expired AWAs.

According to the Australian Bureau of Statistics' consumer price index (CPI) for the year to March 2009, inflation was just 2.5 per cent — down from 3.7 per cent in the December 2008 quarter.

The decision on AWAs comes as Telstra enters separate negotiations with unions over EBAs. Thodey had also flagged his intention in May to take a more conciliatory approach to unions, which resulted earlier this month in the Communications Electrical and Plumbing Union (CEPU) calling off industrial action which targeted Telstra's corporate clients and its Next Generation Operation unit.

But if Telstra hopes the AWA pay rise sets the agenda for union negotiations it may be disappointed. Len Cooper, Victorian Branch secretary of the CEPU, said that it was aiming to more than triple the 2 per cent Telstra had offered staff on AWAs.

"Our claim is seven per cent a year. We haven't settled on a figure yet, but CPI is not a good measure of the cost of living, which is what we're aiming to include," Cooper told ZDNet.com.au today.

"Good faith bargaining with Telstra just started. Wages are one of the issues on the agenda for negotiations and we would expect a decent outcome," he said.