Telstra: 11% pay offer is fair

Telstra has hit back at union unhappiness over the telco's latest attempt to reach consensus on a new enterprise agreement for its workers.

The telco's main union, the Communications, Electrical and Plumbing Union, yesterday confirmed it had rejected an offer which would see staff receive up to 11 per cent pay increases over the next three years, raising the spectre of industrial action after a long period of quiet within Telstra's ranks.

"We remain committed to good faith bargaining and delivering a pay increase to our employees," the telco said in a statement. "We believe this is a good offer, taking into consideration the unprecedented downturn the global economy has experienced. Under the same economic constraints we completely froze pay increases for executives."

The telco said it had proposed a pay increase of 11 per cent over three years — a 2 per cent increase plus an up to 2 per cent sign-on bonus for the first year; a 3 per cent increase for the second year; and 4 per cent for the third year, plus an annual performance bonus for top performers of up to 2.5 per cent each year. The telco also introduced full salary packaging benefits, including $1000 per year towards Telstra products.

"We will continue to work toward finalising an agreement that is equitable for both our employees and our business; one which enables us to meet our customers' expectations and remain competitive," said Telstra. "Negotiations have generally been constructive and we are focused on finalising a fair agreement."

However, the union is not just complaining about the size of Telstra's proposed pay increase, which it wants boosted to 15 per cent.

The union has claimed Telstra wants to put employees on different pay arrangements than those that currently apply to stuff under an enterprise agreement. "Those arrangements would be based on classification structures that have not been negotiated with the union," a CEPU newsletter published last week stated.

In addition, the issue of whether employees would be able to use the full powers of the national workplace relations tribunal Fair Work Australia has not been decided.