Local IT sector unlikely to spawn union activity

The redundancy epidemic hitting the global IT industry looks unlikely to spawn any union activity in Australia.

The redundancy epidemic hitting the global IT industry looks unlikely to spawn any union activity in Australia.

AUSTRALIA (ZDNet Australia) - A fiercely independent IT industry and a tax system that favours secure salary-based employment packages could see a global trend in IT worker unionisation missing Australia altogether, according to two key industry figures.

Federal shadow minister for industry, innovation and technology, Carmen Lawrence, told ZDNet the IT sector was not historically interested in union activity because IT professionals were able to command high salaries without the assistance of union-employer collective agreements.

"There is a sentiment in the IT sector that 'we can go it alone'," she said. "There’s been a sense that they didn’t need the era support."

The worldwide collapse of many IT stocks has seen some tech workers in the US call for greater employment protection. That trend looks likely to extend to Europe as early as next year, according to ZDNet UK.

Executive director of industry group the Internet Industry Association, Peter Coroneos, said Australia’s tax system “disincentivised” heavily option-based employment packages – leaving most IT workers in Australia relatively invulnerable to unfair financial losses.

One piece of tax legislation in Australia requires employees remunerated by share options to declare the value of, and pay tax on, those "unrealised gains", he said. As a result, Coroneos said senior executives with high base salaries were be more likely to accept option-based packages.

Coroneos believes IT industry union activity in the US spawned from a trend that emerged during the tech boom where IT workers agreed to employment packages consisting partly or entirely of share options.

"At the time, everyone (in the US) thought that it was a good enough deal," he said. "The employees came into the game knowing there was a risk. They assumed that risk voluntarily."

Coroneos said in most instances in Australia, employees were not as adversely affected by the IT sector downturn as their employers. “In monetary terms, often the proprietors and the promoters end up losing more than the employees,” he said.

"What value can a union bring when the company has no assets?"

Coroneos believes some IT employee remuneration disaster stories such as the failure of youth portal K*Grind – whose final list of employees is believed to be still owed one month’s salary plus superannuation – are the exception, rather than the rule.