Between NBN Co and a hard place

Between NBN Co and a hard place

Summary: Risk is an interesting conundrum. Risk plus unions an even more interesting one.

TOPICS: NBN, Broadband

Risk is an interesting conundrum. Risk plus unions an even more interesting one.

Independent Contractors Australia today posted an analysis of a draft agreement, which the Communications, Electrical and Plumbing Union (CEPU) has written. The union says it's hoping to get contractors to sign the agreement which provide workers for the National Broadband Network (NBN).

NBN Co signed a deal with Silcar last week for construction of the network after a delay due to its cancellation of its former tender process because all of the bids were too high.

Kevin Brown, NBN Co's head of services, said that the company had taken parts out of the deal that would be done by Telstra under its pending deal with the construction company, and had also taken out parts of the deal that it will get power companies to do.

However, the risk for the rest of the build now lies with Silcar, according to an interview with Inside Business.

"So they work on doing the detailed design, we stamp that off and [at] that stage it's got a price, and the risk moves to them to both deliver it, and deliver it on time and deliver it at the price. And we don't carry that risk. That's their risk to carry," he said.

Sounds great for NBN Co, but perhaps not so great for the contractors, depending on conditions.

CEPU divisional president Len Cooper told me this morning that the union wants to negotiate with contractors on an agreement that will ensure dependent subcontractors aren't exploited in the NBN roll-out. He said the agreement was there to be talked about and in no way final. He also said it was premature to talk about cost blowouts when there was no real idea what the make-up of the workforce would be like.

Independent Contractors Australia (ICA) said in its post, however, that it thought that people who didn't adhere to the said contract wouldn't have a chance at winning NBN work. I'm not sure of how valid this is. NBN Co pointed me to the direction of the CEPU and Silcar.

ICA also said that certain clauses in the contract "effectively neuter any construction company's capacity to manage its workforce so as to maximise productivity and efficiency".

"A company must have union approval on any matter to do with the way it manages its workforce. If the union disapproves, it can declare an industrial dispute and force the company (ultimately) into compulsory arbitration. That is, any operational function is potentially subject to imposed decisions by the union or Fair Work Australia," the post said.

The consequence was that any company would have to only do what the union authorised, according to ICA, and that any company working on the roll-out would have to write a cost escalation cause into the commercial agreement, so that the costs could be passed onto NBN Co.

But, of course, if NBN Co isn't wearing the risks...

At least it's only for two years, which Brown said at the press conference was to give greater certainty to Silcar, but it's still a risky business.

Topics: NBN, Broadband

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • As I said b4,watch the subbies jump ship
  • Well it was always going to noses in the trough what a waste.
  • Let's all get fair dinkum here and come into the real world.

    In every aspect of business life the accepted adage is every man, oops sorry Suzanne, person is worth their hire and supply and demand rules. So be it with the tel-co technicians because they have the Government over a barrel and should not be asked to work for peanuts because the Labor Government wants the NBN costs to be kept low.
    • I agree Syd... but will add, the government and Contractors, shouldn't expect their subbies to work for SFA.

      My biggest concern is, the government will pay a fair price, the subbies will still get paid SFA and the contractors will clean up.

      But let me ask about your new found concern for the average comms employee. Where were you when Telstra were screwing their employees and retrenching them...?

      Ooh that's right, you were supporting precious Telstra... how silly of me!
  • pay peanuts get bananas...
  • Rizz, as you well know my concern has always been with those who are not in a position to demand a fair go from society. Union members, and all Australian have a right to expect a fair share of the prosperity when employed in any industry.

    Please read today's newspapers for an exposure of the obscene salaries paid to the hierarchy of the NBN Co. Belt tightening is good when funds are low but the pain must be borne by all from the CEO to the person who sweeps the floor.

    It was my good fortune to travel to Dorset in the U.K. to study the founders of the Union Movement in the world, the Tolpuddle Martyrs, and every human being should educate themselves to the struggle of the working people and the inhumanity of the oppressors.

    I would expect Telstra, and every other employer in Australia, to pay according to their ability as I would expect every employee to do a fair days work for a fair days pay. Their is ample room for acceptable remuneration in companies whose executives are paid millions a year.
  • BS... I asked you many times to comment on Telstra's sacking and got ...... 0

    Do you believe Sol Trujillo was worth the reported $30m he was paid? Plus what about the assumed $ms he arranged for his "buddies"?

    I bet Sol didn't donate his first years salary to charity as Mike Quigley did. However in saying that I agree, and say it again... everyone across the board should be paid accordingly and fairly...!
  • Rizz, I say again, I do not think that any individual should be paid the millions they are. They are certainly not worth the money. I do include Sol and others in this category. Problem is that with the greed motive the greedy will always be with us. But one thing I do believe is that if people are paid these ridiculous amounts they had better deliver. Kudos to Nike Quigley for his donation of salary to charity.
  • Hmm curious, still nothing on Telstra sackings...?
  • Rizz as with all progressive companies I would expect that over time changes have been made to the staff levels of Telstra both up and down.

    I do not understand your almost pathological effort to demonise Telstra. I would imagine, knowing the expertise of the Unions involved, that Telstra employees would be well looked after concerning redundancy etc.
  • No, Syd... read my lips and stop your greedy BS... I am NOT demonising Telstra...

    I am asking YOU to comment on Telstra sackings... you love to comment and bag the NBN, Optus or whoever else in relation to their employee issues (and rightly so, if they are doing the wrong thing). But what about just a little impartiality (cough)...! No, typically and shamefully you go quiet/AWOL when it's Telstra... disgraceful... !

    ONCE AGAIN, please comment about these (from over the years - where you fell silent) -

    You will note in the comments section in the above URL, I asked where are the NWAT puppets, how

    Please now do not have the audacity to again reply with demoniser, disparager or whatever other lunacy you can conjure...Man-up and be truthful... even just once, I promise it won't hurt!
  • Rizz, with every genuine respect for you, I find it difficult, no impossible, to understand your failure to consider and accept the fact that with changing business conditions, and with regret, it may be necessary for a company to reduce costs by a reduction in Staff levels.

    Perhaps you have had some experience in the past (maybe even concerning Telstra) that has poisoned your thinking and that is understandable, but the facts I have stated above are correct and undeniable and apply to all business that does not have the luxury of a never ending supply of money.

    Also, why do you continue with your childish (please don't be offended) reference to any Telstra shares that I may own? You do appear to project the attitude, by your continual hostility towards Telstra, that you wish ill to Telstra and Telstra owners. Have you no compassion for the other 1,399,999 Australians who own shares in this great Australian company, Telstra?
    • Please don't be offended lala, but I didn't say it (staffing level alterations) was or wasn't necessary, stop playing dumb (you are playing?) and being evasive...I asked why you criticise every other company when they do so... but never Telstra!

      So why do you do this... (which leads to the second part of your impassioned plea)...

      I menton your shares so that those who don't already know, get a clear understanding of why your irrational comments (like bagging other companies for cutting staff but never Telstra - proven again just now) are so Telstra biased.

      The fact that you are unable to see my problem is with about 4 greedy Telstra shareholders, who go to forums and tell blatant NWAT orientated lies and believe Australia's comms should revolve around their portfolios and not with Telstra, is a sad plight on your own intelligence and clearly demonstrates your selfish bias.

      Surely you don't expect us to believe that your 70 000 (wasn't that the figure you quoted when you were personally interviewed at NWAT) T2, TLS shares, down some 60% are the sole reason you laud Telstra 24/7...?
      • Correction: aren't ;-)
  • Apologies Suzanne for straying so far off topic but in a moment of madness, caused by goading from Rizz, I found it impossible to contain myself. I promise to behave in future if Rizz does the same.
  • Rizz, we would appreciate it if you toned your criticism of others down on the forum. Let's keep to the debate without baiting each other.

  • Certainly Suzanne I will do so.

    However it would probably be more ethical for the FUDsters to stop their selfish lies, rather than them sobbing because they are found out, with me simply shedding light on their BS...!
  • With the passage of time the NBN progression gathers interest.

    With the possibility of a change in the business formation of the NBN roll-out caused by a change in political application, several new factors are being revealed. A huge factor of importance will be the condition of the ducts and pipes owned by Telstra and planned for use by the NBN Co. Telstra are duty bound to repair any such facilities that prove to be unserviceable for Fibre Optic use. These costs could be enormous for Telstra.

    Also of major consideration would be the amount of compensation Telstra would require should any Telstra/NBN Co agreement be disrupted, and amounts of 1 to 5 billion dollars have been suggested. Most importantly would be the certainty of future regulation applied to Telstra, which would allow them to plan to compete aggressively on the new playing field without the draconian and restrictive regulation of past years.
  • Who cares about Telstra's compensation (apart from a few disgusting greedy ****ing TLS shareholders)...

    We want what is best for Australia and Australia's comms, not what's best for your ****ing shares...!
  • Rizz please be sensible and follow the excellent advice of Suzanne Tindal who advised you to maintain your composure and behave in a rational and intelligent manner considering the fact that we are civilized human beings. I do know that you own Telstra shares yourself and you must have some considerable arguments with yourself when you are alone with the Telstra hater.