Paper presented at Work, Employment & Society Conference, 11-13 September 2001, University of Nottingham
BEYOND VOICE:
THE EFFECT OF ORGANISATIONAL RESTRUCTURING ON TELECOMMUNICATIONS UNIONISM
SHARON OTOO
This research engages with the current debate on union renewal through an examination of the causal links between organisational restructuring in the British and Australian telecommunications industry and trade union strategy formation. Drawing on case study evidence from Connect and APESMA, two unions representing managerial and professional employees in BT and Telstra respectively, the main research question is answered in three parts. Firstly, organisational restructuring and downsizing in BT and Telstra is contextualised within the wider changes in the telecommunications industry. Secondly, the effect of repeated organisational restructuring on the careers and perceptions of managers and professionals is analysed. Thirdly, the direct structural effects of organisational restructuring in BT and Telstra on the managerial unions themselves are studied, as well as the counter strategies employed in order to ensure survival. It is shown that the effects of organisational restructuring on managerial unions have been both direct (on union structures) and indirect (on actual and potential membership). However, despite (or perhaps because of) situations of crisis, organised labour can and does develop strategies proactively and unions do have an effect on their immediate and wider environment.
Introduction: The Changing Role of Unions in the Telecommunications Industry
'You may not have a job for life, but you have A UNION FOR LIFE...'
Connect publicity document (Connect, 2000, original emphasis)
'Our emphasis is gradually changing from collective representation to individual service...there is a well-established trend away from the standard employment structure to individual contracting. With this change, there is a greater need for tailored solutions...'
R. J. Allen, General President of APESMA (1996:3)
In recent years, many former state-owned monopolies across the globe have been transformed into privatised companies operating in increasingly competitive environments. In Britain alone, there are over 300 licensed operators and in Australia the figure is comparable. The former monopoly players are losing market share in the traditional telephony sectors and are now diversifying beyond voice into the newer sectors, for example mobile telephony, data transmission and electronic services (Darlington, 1997, Fairbrother, 1998). Rapid technological advancements and the increasing convergence of the IT, media and telecommunications industries have also contributed to the uncertainty and turbulence experienced in the current operating environment. The role of organised labour in the telecommunications industry has naturally been affected by these developments (Dubb, 1999, Katz, 1997b, Katz et al., 2000). The restructuring processes have eroded the traditional strengths of telecommunications employees, which were based on monopoly industry conditions, clear career paths and lifetime employment (Barton & Teicher, 1999). As is alluded to in the opening quotation, the concept of a 'job for life' is no longer relevant. Telecommunications unions have had to devise new strategies and provide services beyond the representation of collective interests in order to survive. In particular, those representing managerial and professional employees have had to confront additional challenges specific to the nature of their membership (Bamber, 1986). Increasing numbers of managerial employees are asking: 'what can the union do for me?' when, as stated in the second quote, collective bargaining for managerial and professional grades is on the decline.
Organisational restructuring takes many forms. The primary focus of this research is the extensive downsizing that has occurred in the former monopoly companies, BT and Telstra.(1) The effects of recent changes in telecommunications industry on employee relations has received much attention from academic researchers and analysts, however, very few have focused on unions, (for example Bamber et al., 1997, Ferner & Terry, 1997) and those that do have typically had non-managerial unions as their units of analysis (Batstone et al., 1984, Dubb, 1999, Fairbrother, 1994, see also Fairbrother, 1998, Katz et al., 2000, Mosco & Zureik, 1988 for further discussion of studies on trade unions in telecommunications). A study, which shows how telecommunications unions have influenced the very changes that have threatened their survival (or, according to Fairbrother, (1994) the changes that have given opportunities for renewal) in the British and Australian telecommunications industries is lacking. In this paper, the challenges facing unions, and the strategies they employ to deal with them, are analysed through detailed discussion of three main areas. Firstly, the context of organisational restructuring and downsizing in BT and Telstra, including the wider changes in the telecommunications industry is examined. Secondly, the effect of repeated organisational restructuring on the careers of managers and professionals, and their perceptions of the benefits of union membership is analysed. Thirdly, the direct structural effects of organisational restructuring on the managerial unions themselves are studied as well as the strategies employed in order to ensure survival. By comparing the cases of Britain and Australia, further insights can be made about the Anglo-Saxon model of telecommunications restructuring (Katz, 1997a) and the effects that different national industrial relations contexts have on the formulation of trade union strategy.
This research is based on data gathered during a period of fieldwork in the spring and summer of 2001 in England and Australia. Numerous semi-structured interviews were conducted with lay members, branch activists, executive council members of the unions Connect and the Association of Professionals, Engineers, Scientists and Managers, Australia (APESMA). Additionally, in-depth interviews were carried out with middle and senior managers in BT and Telstra. In England 38 males, (4 minority ethnic) and 4 females (1 minority ethnic) were consulted, and in Australia 19 males and 9 females were consulted (0 minority ethnic), through focus group and interview. None had any visible disabilities. Interview material was supplemented by detailed analysis of documents obtained from various British and Australian telecommunications unions (including those representing non-managerial employees), publications and documents from Connect, APESMA, BT and Telstra, observations of union meetings, attendance of union conferences and newspaper articles.
Liberalising Telecommunications: The Context of Organisational Restructuring in BT and Telstra
Most of the former telecommunications monopolists (for example AT&T, BT, NTT and Deutsche Telekom) continue to dominate the expanding and diversified telecommunications service industry both within their national borders and internationally. This is despite the introduction of competition in many national markets and the near total liberalisation of the industry.(2) Previously, most countries had one state-owned telecommunications operator, which was usually in the same organisation as the national postal services provider. This public company typically had a monopoly on all aspects on telecommunications services and equipment provision. Moreover, employees tended to be well-trained, well-paid, unionised and expected to remain with the company until retirement (Katz, 1997a). However in the late 1970s, the United States began to liberalise its telecommunications industry. Britain followed very quickly, privatising BT in 1984, and since then almost every nation has introduced competition into the national telecommunications market. All telecommunication companies have faced pressure from increasing technological developments as well as industry convergence with the information technology and media entertainment. The increasing liberalisation of the industry has proven to be challenging for many former telecommunications monopolists. On the one hand, the companies that traditionally provided telephone services clearly continue to have a very central role to play in the emerging information age, as they are the constructors and operators of the basic telecommunications information networks. However on the other hand, these same companies are in the process of redefining what they do, and this redefinition involves choices and dilemmas with respect to where to invest, what products markets to enter, how to restructure, and how to reduce labour costs while retaining employee commitment and an appropriate skill base. The restructuring and imminent break-up of companies like AT&T and BT, as well as the financial difficulties currently being experienced by companies like Deutsche Telekom, France Telecom are testament to this.
In the manufacturing sector there has been much discussion about the production methods and employment relations characteristic of the Japanese lean production system (Williams et al., 1994, Womack et al., 1990). There is however no analogous model in the telecommunications industry (Katz, 1997a:4). The US and the UK have taken the lead in restructuring, however these countries have sought competitive advantage through technology and market strategies and not human resource strategies as in the Japanese manufacturing case. Furthermore, there is little evidence that any one set of work practices or style of employment relations has performance advantages in the telecommunications industry. Katz (1997a) identifies three models of telecommunications restructuring: i) technology and market driven, or the Anglo-Saxon model, found in the US, UK, Canada and Australia, ii) labor-mediated, found in Europe and Japan and iii) state-led, found in Mexico and Korea. This research compares two countries which, according to Katz (1997a) have restructured their telecommunications industries along an 'Anglo-Saxon' model: Britain and Australia.
Britain became the first European country to follow the example provided by the United States and liberalise its own telecommunications market in 1981. The first British Telecommunications Act (1981) split British Telecom from the Post Office and abolished its legal monopoly over network operation, the supply of network service and most apparatus supply (Beesley & Laidlaw, 1995, Newman, 1986). In the following year, the government announced its intention of privatising British Telecom and creating OFTEL as a regulatory body. Also in 1982, Mercury Communications was licensed to operate a second fixed link in direct competition, and soon after, the BT/Mercury duopoly was announced. In order to cope with these developments, the then chairman of British Telecom, Sir George Jefferson, introduced new measures which departed from the principles of public service including the recruitment of senior managers and board members from the private sector and aiming to reduce operating costs by targeting the size of the workforce (Hallet, 1987). In November 1984, the Conservative government sold 50.2 per cent of the company's shares, making British Telecom the first major public corporation in the UK to be privatised. Competition in the telecommunications sector intensified soon after. By the end of 1988, five companies had been licensed as major public telephone operators (PTOs) in the UK (BT, Mercury Communications, Kingston Communications, Racal-Vodafone and Telecom Securicor Cellular Radio Ltd.) and by 1991 the termination of the BT/Mercury duopoly policy lead the way to several new companies, including overseas competitors like AT&T, being granted licenses to operate fixed link networks in the United Kingdom.
The process of liberalisation began comparatively late in Australia. Until it was one third privatised in 1997, Telstra was entirely owned by the Australian government and the nation's principal telecommunications carrier (Barton & Teicher, 1999). At the same time, the Australian telecommunications market was opened to competition for the first time. Similar to events in Britain, the deregulation process in Australia began with the separation of the posts and telecommunications departments. This took place in 1975, however despite the publication of the Davidson report in 1982, which recommended the extension of competition into certain areas of the telecommunications market, deregulation did not actually take place until 1990. Several constraints had prevented the Australian government from making reforms as radical as in other western countries, for example the considerable autonomy of Australian states within the federal structure and the bicameral parliament which consistently blocked legislation proposed by the government (Ross & Bamber, 2000). Therefore the process of liberalisation in Australian telecommunications occurred largely in the last ten years. However by the end of 2000, Telstra was still not yet fully privatised as 50.1 per cent of the company still belonged to the government. AUSTEL, the Australian equivalent of OFTEL, was created in 1988. in order to regulate the industry. Optus Communications was granted a carrier license in 1991, signalling the beginning of a duopoly arrangement similar to that of BT/Mercury which lasted until 1997. Also similar to the British case was the emphasis by Telstra management on cost reduction through reducing the size of the workforce (Ross & Bamber, 2000).
In just ten years, BT has managed to reduce its workforce by approximately 50 per cent from 249,000 to 125,000 (BT, 1990-2000). Around 94,000 left the company between 1990 and 1995, including thousands of managerial staff. Between 1990 and 1999 Telstra's workforce was cut from 87,000 to 52,800 - a reduction of just under 40 per cent (AOTC, 1992, Telstra, 1994-2000). In both companies these reductions were largely achieved through voluntary redundancy (VR) programmes. The figures however give only a very general picture. Two points in particular are worth noting. Firstly, within the overall fall, some occupational groups were more affected than others. In both companies, senior management aimed to retain highly skilled staff while outsourcing much of the work performed by less skilled staff. Typically therefore, services like cleaning and catering were outsourced very early on. Secondly, senior management has been concerned with reskilling the aggregate workforce, therefore large numbers of employees with 'redundant' skills (generally operators and technicians) were offered generous severance packages and recruitment has been concentrated in the areas IT, sales and marketing. Therefore, downsizing has actually been greater than the figures suggest - one reason why senior management in BT and Telstra both prefer the term 'rightsizing' (interview BTV3). The next section of the paper focuses on how have these developments have affected managerial and professional employees in BT and Telstra as well as their perceptions of unions and union membership. This has consequences for Connect and APESMA respectively, as these employees form their potential and actual membership and are therefore the target of recruitment strategies.
Managers, Organisational Restructuring and Perceptions of Trade Unionism
As stated before, extensive downsizing has characterised developments in both BT and Telstra and this has affected managerial and professional employees in both companies to a great extent. For example, according to Newell and Dopson (1995:8) between 4,000 and 5,000 managerial jobs were cut in BT in the early 1990s, during the first rounds of downsizing in order to 'delayer' the company. In Telstra, managerial staff was cut from 1139 to 372 between 1998 and 1999. Professional employees were cut from 1821 to 1188 in the same period (Telstra, 2000). This has affected managerial work and careers in many ways (for example, introduction of performance related pay, increased company reliance on contingent labour, internal redeployment). This section however, focuses on the effect of organisational restructuring on managerial and professional employees' experience of voluntary redundancy (VR), workloads and stress and perception of the benefits of union membership.
In BT, the lower level managers (MPGs) tended to express anxiety about their futures within the companies. Instances of 'survivor syndrome' have been well documented (Littler, 1996, McGovern et al., 1998, Worrall et al., 2000) and was found to be evident in BT also. Typically, the redundancies have been voluntary, something that has been identified as 'an amazing achievement' (interview BTV5) on the part of the company and the unions (Connect and CWU, representing non-managerial employees), especially when one considers the numbers of employees involved (according to one union activist (participant, focus group BTG3) perhaps as many as 200,000). However, there were isolated cases where people had been known to have been asked to leave the company or offered redeployment:
'...it's voluntary to the press and everybody else, it is voluntary if you are a strong person then they can't push you out, but if you're a weak person, senior managers can bully you...I certainly knew of one colleague of mine who was bullied into signing to go voluntarily...' (interview BTV7)
Paradoxically however, many employees in BT were looking forward to being offered VR particularly as the packages offered (averaging two years salary with enhanced pension) were quite generous. A Connect branch representative commented that he had received many calls about the release schemes in the early 1990s, but all were complaints that '…the bastards won't let me go!' (participant, focus group BTG3). This paradox could be explained by the fact that workers wanted to be in the position to choose the ideal time to leave. Those who were happy to accept the voluntary release schemes were either close to retirement age or were relatively young and confident that they would be able to sell their skills on the still new and expanding employment market.
One senior level manager reported that more senior level BT managers (PCGs/PSGs) tended to be optimistic about their situation, particularly in BT's expanding units Yell, Ignite and Wireless (BTD1). These managers accepted change and instability as a normal part of a modern career and tended to be confident that they would be able to sell their skills on the marketplace and 'survive' any changes. Moreover, the female BT managers interviewed were also all very optimistic about their career options, suggesting that they accepted and welcomed change:
'...I like to be ahead of the game, I don't want to be taken with the flow, so as soon as I, you know, suspect that there's going to be something happening to me that I don't like I would rather be in control and move somewhere else...' (participant, focus group BTG4).
The pattern for managers in Telstra was much the same. There were also lower-level managers employed by the company, who had been frustrated by the availability of VR programmes, in that they were not able to accept them:
'...there are still a handful of us, who are left who never quite made it out when the getting was good and now that we would like to go, we can't!' (interview TEV22).
Similar to the situation in BT, managers reported the same kind of targeting of candidates considered suitable for redundancy taking place:
'...several layers of management were basically made redundant...and that was all the people that had been around for thirty years or so, or nearly all of them, there was still a few of us left at that stage, but probably two-thirds or three-quarters of the experienced people ended up leaving within a relatively short time - pretty much anyone who was seen as not being a team player...you were offered a redundancy package or invited to leave...' (interview TEV22)
There was no reporting of any negative effects of targeting. More senior managers even extolled the virtues of VR and did not feel personally threatened by its existence:
'...(Telstra) have gone through downsizing, where we've paid people to leave, now that's a great thing for people, especially when they've had thirty years service in the business, they've got old skills and they may not find another role, it's a great thing to have, but for me personally? (pause) well it would be nice to be paid to leave the organisation, but for me it's not an option because I have a career and I would be looking at redeployment in the business or finding another role elsewhere etc. That to me is not a personal issue...(interview TEV2)
Moreover, similar to BT, female managers in Telstra viewed the recent changes as positive and welcomed the dynamic nature of their career paths in the context of organisational change:
'...the perception in the marketplace would be that I hadn't moved around because I've been with Telstra for eleven years. But in that eleven years I've worked for four or five different companies within the business. They all had their own culture, method of operation, different workgroups etc. So from my perspective...I think Telstra has been an excellent area of employment for me, because I've had the opportunities of development and the ability to move into different roles as part of my career path...' (interview TEV2)
There was a great degree of consensus both in BT and Telstra that workloads and stress had increased as a result of downsizing. Surveys conducted annually by Connect show that, during the 1990s, high numbers of managerial and professional grades in BT have worked in excess of their contracted hours on a regular basis and suffer stress related symptoms of tiredness and headaches:
'Stress is always there because even though you are supposed to work smarter and not harder and everything, we still have very tight timescales and commitments...the managers, like they have their targets to be met and they're passed down through the chain and...it's a form of stress to comply with those commitments, especially when it comes to revenue making...' (interview BTV8)
'I earn a lot more money than I used to, but I'm definitely doing a disproportionate amount of work for the extra money, for the extra work for the extra money. Some people scoff at stress and things, but some people don't realise that they're suffering from it...' (interview BTV21)
One senior BT manager linked stress to greater societal changes and argued that the key to stress reduction would be to empower people to have greater control over their working day (BTD1).
In Telstra some employees were particularly critical of the changes, especially with regard to its effect on what they called 'the company culture' (TEV9). It was felt that the move from public to part private ownership had been detrimental to the community ethos, which Telstra once had.
'...We are under a lot of stress to learn...and do quickly, more risk-taking, more accountability, more innovation required from people...I don't look at stress as a bad thing here, when I look at the pace of life and the amount of work I would do in one day today compared to the amount of work I would do ten years ago, stress or workload has definitely increased...' (interview TEV2)
'...going back two years ago I was in hospital with a blood pressure related disorder, I had uncontrollable nose bleeds and I actually had to have blood transfusions, and that was essentially from the stress of the job that I was trying to do at that stage...' (interview TEV22)
However although more senior managers in both companies agreed that stress levels and workloads had increased, they reported that stress was not necessarily bad, and that certain levels of stress were necessary in order for a job to remain interesting and challenging (BTV3, BTV2, TEV14).
The biggest difference found between BT and Telstra managerial employees were in attitudes to unions and union membership. Both groups tended to feel that the balance of power between labour and management had tipped decidedly in favour of management over the last ten years and that unions were 'powerless' to do anything about the situation. However, in BT union density in managerial and professional grades is still quite high (about 70 per cent for lower managers (MPGs) and about 50 per cent more senior managers (PCGs and PSGs) estimate by senior manager, interview BTV1), when compared to overall union density in Britain (see table 1).
Table 1: Trade Union Membership and Density in United Kingdom and Australia
United Kingdom |
Australia |
|||
Number of Members (000s) |
Union Density (%) |
Number of Members (000s) |
Union Density (%) |
|
| 1985 | 9,739 | 45.0 | 2,793 | 50.0 |
| 1995 | 7,280 | 32.9 | 2,440 | 35.2 |
| Percentage
Change |
-25.2 | -12.6 | -12.6 | -14.8 |
(source: ILO, 1997)
The BT managerial employees interviewed (all union members) tended to state that they remained union members, largely as an 'insurance' measure or because of the access to information:
'...it's not a particularly heavy involvement but I am interested in what the union does and it's a useful source of information...that's probably the real reason...it's a useful alternative source of information about what's going on. You don't necessarily hear it from line management...' (interview BTV5)
'(I am a member)...for a couple of reasons, one is a damn good insurance package just in case and also you never know if you're going to get a horrendous boss at some stage, who comes down heavily on you, you never know, you might have to rely on some cheap, or free legal advice from them...plus it also, in my role as well, with all the literature that they send you out, it keeps you abreast of what the union's thinking as well. So in that respect I've told (line manager) on numerous occasions, and he keeps thinking I'm joking, that the company should pay my union subscriptions, 'cause they get more benefit out of it than I do...' (HR manager, interview BTV3)
'...I think if you ask people why they belong to a union I think its, it provides them with an insurance policy, it's like a professional insurance policy...' (interview BTV5)
Interestingly in BT, union members can be found right up to the higher levels of management. And according to one ex-employee, there is even a Connect member at director level (interview BTV26).
In Telstra, unionism is generally seen in more negative terms. Union density among managerial and professional grades in Telstra is perceived to be relatively low compared to other public sector companies (exact figures are unavailable, union estimates are about 70 percent of non-managerial workforce, management estimates are lower), however this figure is high in comparison to general Australian union density figures (see table 1, above). Of the 22 managerial and professional employees interviewed, 16 were not currently union members, although almost all of them had been at some point in the past (3 had not). The employees not belonging to a union generally did not see the relevance of union membership, with comments ranging from: '...treating (the workforce) as a collective is not necessarily relevant today...' (interview TEV2) to 'let's face it...in the public sector we are running out of things to complain about...(interview TEV3). Moreover, some Telstra employees felt that unionism was incompatible with their management role (interview TEV8). There also were reports from some managers, that the unions were seen to be out of touch with the realities of the modern business environment and particularly, with the workers within that environment:
...where we have large groups of union members, they've become very...disenchanted with the union because, unless there's an issue that impacts the mass, they are not really assisting the individuals, so that's where individual members start to lose faith and withdraw their membership from the union...' (interview TEV2).
'...When I first walked into my first place of employment and I was approached about joining the union, the approach came from a man who was sitting at his desk, who had his feet on the desk, and he had a red face, sort of he looked like he spent more time in the pub than doing something, and my first impression was, "I don't want to be part of something that is about your behaviour, I'm here to perform", ... I saw no relevance in that, I didn't really need a group behind me to represent me, I didn't feel that I was poorly paid in any way and certainly, the model of the union that was offered to me at that time put me off joining the union and I have never been a member of the union during my entire time of employment...' (interview TEV2)
Those employees who did still belong to a union generally were also in it for 'insurance' purposes, particularly as they were on individual contracts and the unions were no longer negotiating employment contracts:
'...when I signed the contract, even though it's probably never gonna happen in practice, one thing I was concious of was, theoretically, if there was ever any dispute over my contract, it would basically be me against Telstra, and I thought well, if it ever came to that, I would like the backing of a union to assist me in my case...' (interview TEV18).
The next section focuses on how these twin factors of company restructuring and changes in employee experience have affected the unions representing managerial and professional employees in BT and Telstra.
The Changing Context of Managerial Unions in Telecommunications
The general decline of union membership and union density in Britain and Australia is well documented (see for example Aldcroft & Oliver, 2000, Edwards et al., 1998, Griffin & Svensen, 1996). In table 1 (above), it can be seen that the total number of union members dropped between 1985 and 1995 by over 12 per cent in Australia, and by at least a quarter in the United Kingdom. Moreover union density, (expressed as the percentage of wage and salary earners who are union members), has also declined considerably from over 45 per cent in both countries to below 36 per cent (ILO, 1997). Many commentators on British and Australian industrial relations agree that factors which have contributed to this decline include increasingly hostile managers encouraged by anti-union legislation in both countries, changing employment structures and industry conditions as well as inertia on the part of most trade unions to deal with the changing industrial and economic context (Bahr, 1998, Bamber et al., 1997, Barton & Teicher, 1999, Ferner & Colling, 1991, Ferner & Terry, 1997). It is within this context of worsening conditions for trade unions, as well as the restructuring that has taken place in the telecommunications industry, together with changing managerial employee attitudes to unions, that the behaviour and strategic decision making of Connect and APESMA will be examined.
§ Connect
In the beginning of the 1980s, almost 90 per cent of managers and professionals in the company belonged to the Society of Telecoms Executives (STE), now known as Connect. This was the union recognised by BT to conduct collective bargaining for all managerial employees, and it had almost 30,000 members. As BT employee numbers expanded throughout the 1980s, union membership grew accordingly (interviews BTV24, BTV25). There was no organisation strategy as such: it was assumed that when you joined BT, you automatically joined a union. On promotion into managerial grades, the question was not whether to join a union or not, but '...which one?' (interview BTV1). There was no closed shop in operation, but there was a support for union membership throughout all chains in the managerial hierarchy. For example, a union official reports how a separate section of the BT induction day used to be set aside for the union, and union membership papers were handed out at the same time as all forms of company documentation (interview BTV24). The union at the time could therefore afford to be quite 'arrogant' and 'lazy' (interview BTV25). During the 1990s, close to 6,000 managerial and professional grades left BT. This translated into huge losses in union membership for the STE and damaged the branch structure of the union, as many committed activists also accepted voluntary redundancy (VR) and left the company. This had the double impact of leaving important positions in the union's democratic structure unfilled and making it difficult to recruit new members. Also during the 1990s, traditional patterns of employment changed, to those including part-time workers, home-workers and agency staff. A third major blow to the STE was the derecognition of the union for the collective bargaining of wages and conditions for senior management in 1983 and the promotion of personal contracts for managers in the late 1980s and early 1990s.
The political context of industrial relations in BT has been significant. It is generally agreed that even though much of the anti-union legislation of the conservative era remains, the 'mood music has definitely changed' (BTD5). In the introduction of a union publication, the General Secretary, Simon Petch of the union wrote:
'1997 was a significant year for the STE. Labour's victory in the May General Election transformed the background against which we worked for our members...This government is committed to re-establishing rights at work, including employee's right to chose to have their union represent them collectively...'
(Petch, 1998)
According to a executive committee member of Connect, BT's strategy of union exclusion during the 1980s and 1990s was certainly influenced by the government policies of the time (informal conversation). For example, the derecognition of the STE for the collective bargaining of senior management remuneration in the early 1980s would not have been possible under the present Labour government. Moreover, once the government changed in 1997, the situation improved considerably:
'...The consequences (of the election of the Labour government) for the STE. Instead of being pre-occupied with the problems of survival, we are now able to get on with the real job of improving the way we represent our members' interests...'
(Petch, 1998)
§ APESMA
APESMA's relationship to Telstra is very different to Connect's relationship with BT. APESMA is one of three unions, which has managerial and professional members in Telstra (the others being the CEPU and the CPSU, both of which also represent non-managerial grades), although APESMA is the only 'managerial' union in the company. Secondly, APESMA, both in its present as well as its predecessor forms, has always had to negotiate with multiple employers (Connect in its predecessor form negotiated exclusively with BT ) (3). The majority of APESMA members are not employed by Telstra or even any other telecommunications company (of APESMA's 45,000 members, just 2,500 are employed by Telstra). Thirdly, Telstra only recognises APESMA to the extent that it is legally required to do so (some would argue that in this respect BT's relationship with Connect is exactly the same. However, the evidence presented in this research points to genuine partnership rather than mere tolerance). Therefore in all negotiations concerning Enterprise Bargaining Agreements (EBA), APESMA negotiates minimum levels of pay for managerial and professional groups in the company, for those who are not on Australian Workplace Agreements (individual contracts). Finally, APESMA is not legally allowed to represent certain groups of managers and senior employees who do not have professional qualifications. For this reason, a sister association, the Managers and Financial Executives Association (MFEA) has been established, to represent these groups. Of all the telecommunications unions, however, APESMA is the closest counterpart to Connect. As in BT, there has been a tradition of union membership in Telstra. The great majority of Telstra engineers and professional scientists as well as other senior managers all have been represented by APESMA, or one of its founder unions, in the past.
The decline of union membership in Telstra, has therefore not had as dramatic an impact on APESMA as the decline of union membership in BT has had on Connect. However, as in the British case, the political context has affected the industrial relations environment within which APESMA operates. In Australia, the government has changed left-wing to right-wing (during the same time span when the reverse occurred in the UK). The Howard conservative coalition government was elected in 1996. It very quickly passed the Workplace Relations Act (1996), which saw the creation of the Australian Workplace Agreement (AWA), an individual employment contract. Furthermore, the Act altered the role of the Australian Industrial Relations Commission (AIRC) (a body in Australia responsible for conciliation and arbitration between representatives of managers and employees), by restricting the matters over which it has jurisdiction to twenty 'allowable matters'. In this way, the role of the union and the commission has been reduced by law. Again, the influence of the political environment on industrial relations within the company is apparent, and could change, if there is a change in government:
'...I would say the membership of all the unions is declining, as we move more and more to this environment of contract employment. Now, things may change with the new government potentially coming in, if the Labor government comes in they may revisit this whole process...' (interview TEV2)
The Strategic Behaviour of Managerial Unions in the Telecommunications Industry
This analysis of the strategic behaviour of Connect and APESMA is summarised in terms of a) their relationship with the members, b) their relationship with the telecommunications employers, and c) their relationship with other external organisations (regulatory bodies and international labour unions).
§ Connect
During a 1997 two day residential seminar in Oxford of STE senior officers and executive council members, it was agreed that in order to adequately service existing members as well as recruit new ones, the union needed to address the changes that had taken place in the careers and working lives of managers and professionals in the telecommunications industry. Several points became apparent. Firstly, potential and actual STE members were now less likely to remain in one company for their entire career. In 1997, BT was in its seventh consecutive year of offering voluntary release from the company and ex-BT employees were finding attractive positions in new telecommunications companies. Secondly, BT was no longer the sole employer of telecommunications workers, as was the position before liberalisation. Of the 80,000 managerial and professional employees in the telecommunications sector in the year 2000, only 30,000 were employed by BT (interview BTV24). Although BT was still the dominant employer, the company was aiming to reduce its headcount, and in order to survive the union had to shift its focus from being a one company union. Thirdly, since the privatisation of BT, the provision of in-house skills development and training had been reduced or, in the case of contractors, was not provided at all. In the 1990s training provided by BT had amounted to 5 days per year per manager. By the year 2000, this had been reduced to 2 days per year. Fourthly, people choosing 'atypical' forms of employment were rising in number. These included part-time workers, contractors, homeworkers, teleworkers and those who were working for BT abroad or taking extended leave from work. None of these groups were being adequately serviced by the union in 1997.
In 1989 our membership and BT's managerial membership was predominantly male, white, middle-aged, promoted through the company, career time served people and they were predominantly engineers. And none of those are now true, I think it might still be male, but in every other sense it's different, it might still be predominantly white actually but you know there are far more women, there are more people who aren't white, and not in any way a representative number, and there are far, far fewer engineers and far more people from you know if you like new professions, software engineering, computing generally, marketing, sales, finance, a huge amount of growth in the area of finance - BT only had one qualified accountant in 1984 (interview BTV23).
Finally, the unions role of collective bargaining had been reduced. In order to recruit and retain non-MPG members, the union had to provide more than the traditional industrial services. In order to survive, the union had to become relevant to all these groups of workers.
The 'Changing the Union' campaign, was launched at the next annual conference, where the clear aim to become a 'union for life' was stated. The union was to retain and recruit members through the pursuit of an organising and servicing campaign. In terms of servicing, many of the major ideas had been implemented by 2000 and the change of name from STE to Connect, signalled to members and external bodies that the union had reinvented itself. Moreover the services to the members were improved and these included many non-industrial services, for example career training, financial and legal services and a union sickness benefit. This has been part of the clear strategy for retaining members. In a presentation to the union at annual conference, the Director of Organisation stated that recruitment costs could amount to five times the annual subscription of the average member (Similarly, the Executive Director of APESMA quoted in a seminar to the Connect Executive Council that it costs tens times more to recruit a new member than retain an old one). The union however also took the decision to make increased recruitment a strategic priority. The successful operation of the union and servicing of its members, depended on it having a large and growing membership base with which to finance its operations. To this end, the number of full-time organisers was increased from just one in 1993 to 10 at 2001, including the Director of Organisation. In 2000, at the union's annual conference, the delegates agreed that the union would go into deficit financing (for three years) in order to fund growth (Connect, 2001:48). Table 2 shows the financial development of the organisation in the years 1998, 1999 and 2000. It is perhaps too early to tell if the deficit funding strategy has paid off, but certainly the drop in overall membership experienced during the 1990s has finally reversed (see table 3).
Table 2: Financial Development of Connect 1998-2000
| During 1998 | During 1999 | During 2000 | |
| Membership | -215 | +609 | +260 |
| Subscription Income | -£11,889 | +£4,154 | +£100,730 |
| Staffing | +4 | +2 | +2 |
| Expenditure | +£175,228 | +£305,192* | +£28,201 |
(Source: Report of General Secretary given at 2001 Annual Conference, Annual Reports 2000, 2001)
*Note: The Expenditure figure is high for 1999 because it includes move to new head office and costs associated with changing the unions' name.
Table 3: Membership Figures of Connect
| Year
beginning |
BT | Non-BT | Total |
| 1995 | 19,001 | 1,431 | 20,432 |
| 1996 | 16,623 | 1,928 | 18,551 |
| 1997 | 15,227 | 2,203 | 17,430 |
| 1998 | 14,833 | 2,129 | 16,962 |
| 1999 | 14,285 | 2,462 | 16,747 |
| 2000 | 14,749 | 2,607 | 17,356 |
| 2001 | 13,534 | 4,082 | 17,616 |
(Source: Personal Letter from General Secretary, Connect 2001)
Recruitment has grown in the areas outside BT in almost every year since 1995 (see table 3, above). Despite that fact that during the same period, BT membership in Connect dropped from just over 19,000 to approximately 13,500, there have been some encouraging signs of recovery. These are aggregate figures and therefore mask the considerable recruitment efforts which are taking place inside BT. One union official described the situation as 'running to stand still' (interview BTV25). Typically, whenever substantial gains in membership have been made within the company, another round of VR has been offered and considerable numbers of members leave the company and union. Notwithstanding, Connect celebrated a major achievement in 2000. This was the first year in which overall membership had grown, despite a drop in the number of the union members employed by BT.
Both company and union representatives agreed that Connect's relationship with BT has also greatly improved since 1997. There has been an attempt to work in partnership with the company, rather than against it, and this has been noticed by the lay members:
'I think in a way its strategy's been to, to work with management, rather than take a militant view and I think that generally has worked well...' (interview BTV5).
This was part of a deliberate strategy to improve the relationship with the company, in order to better service the needs of members.
We barely spoke to each other, there we were running around claiming that we represented the managers and professionals in BT and we barely spoke to each other. The only basis in which we could get BT to listen to us on occasions was we used to organise rallies outside the BT headquarters, you know sort of have a rabble of members outside there shouting at them from the outside, honestly, it almost got to that stage (interview BTV22).
There was also general consensus that the improved relationship between BT and Connect came about because of the changes Connect implemented:
'...we've changed (the relationship) in quite a positive and structured and deliberate way. What we've sought to do is to create a kind of an account management approach to our industrial relations...to create a kind of an on-going managed relationship in which we demonstrate that the union has a value to the company...' (interview BTV23)
...what we spent a lot of time doing over the last few years is trying to create a much changed industrial environment which is based on a high measure of mutual respect for a start, instead of the kind of mutual antagonism that applied, and in which we demonstrate the value to the company of dealing with us as opposed to not dealing with us. And we've been quite successful in that I think to the company's advantage, as well as to the advantage of our members, and our members have been greatly advantaged by this approach, but you know it's also been to the benefit of the company. I should add that although we've changed our situation and it's been us not BT that's been instrumental in this change, by and large...' (interview BTV23).
However, as mentioned earlier, the changed political context (from Conservative to Labour in 1997) was also significant:
'...with the change of government was a change in the background noise if you like, in society and industrial relations in general, even employers like BT began to realise that you know the days of being backed by Tory legislation or anything they wanted to do had gone; I don't think any of us expected the arrival of the new Labour government to suddenly herald you know the revolution and everything would be back to the workers, but nevertheless the company was aware that there was going to be legislation going to be coming along, it was in the manifesto about trade union recognition about making it much more difficult to derecognise trade unions, there was going to be a strong push from the government towards partnership and working together to resolve problems...(BT are) usually fairly political sophisticated, and they know that as a big blue-chip company in the UK they can't be seen to be a maverick because they've got a massive customer base, they can't be seen to be stupid....(interview BTV22).
Connect has also developed its relationships with external influential bodies. Simon Petch, the union's General Secretary recognised the importance of establishing an international presence in terms of influence, lobbying and joint campaigns with other unions very early on:
'...we hit way above our weight internationally, and that is mainly due to all the work that the General Secretary has done in the...international trade secretariat for all the communications unions world-wide, which is called UNI. Simon I have to say, much against the resistance of some of his colleagues in the early years, has always taken as high as possible profile in the international stake, and I think he understood before any of us the way in which the communications industry was going, it was no longer going to be you know a nationalised industry country by country, each with its favoured operator and all the rest of it, that it was going to become this enormous global industry with these enormous globally based telecoms companies, and we do need to have an international perspective of that...we've now got good relationships with the American sister union in the States, they can help us out with AT&T and so on and that's just one example...we have a very high profile internationally. And as I say that is largely down to one person, who has been determined that that should be so, and that was absolutely the right strategy (BTV22).
This international strategy has been achieved largely through forging links with other communications unions world wide, primarily through Connect's participation in UNI (Union Network International). UNI has 15,500,000 members affiliated in numerous different industries, however it is organised in such a way that Connect focuses activities on four areas: UNI Telecoms, the UNI subgroup which deals with the Information Communication Technology sector, UNI Professional and Managerial Staff group and the UNI network of women's organisations. Petch represents the English and Irish unions at the European Congress of UNI Telecoms. Also the at the end of the 1990s, Connect, CWU and the Communications Workers of America (CWA) set up an Atlantic Alliance to co-ordinate the campaigns of the three unions. In particular, they agreed to play a leading role in the international campaign to organise the Cable and Wireless group of companies throughout the world. There is a high degree of cooperation and mutual learning between the European telecommunications unions, and Connect has good working relationships with Ver.di (Germany), CFDT (France), SIF (Sweden) and Seko (Sweden).
In terms of activity within the UK, Connect's General Secretary is a member of the Government's Better Regulation Task Force, which in July 2001 issued a report into the regulatory regimes in the energy, telecommunications and aviation industries. It also has strong links with the Trades Union Congress (TUC) and the British Labour Party. The union has been successful in past campaigns, at influencing government policy in relation to the telecommunications industry. In describing for example the campaign against privatisation during the 1980s, one union official recalls:
'...the aim of the campaign was to campaign against privatisation but also in favour of changes to the government's policy, in terms of the way in which the company was privatised, and in that respect we were actually quite successful, what we did was to assist in and lobby for changes to the telecommunications bill which actually privatised BT which created the legislative and regulatory environment of BT...what we were keen to do in particular was to protect jobs and therefore we sought to protect things like rural telecommunication services, phone boxes, the operator assistant service, directory enquiries, services for the disabled, and we wanted also to prevent a situation in which the competitors creamed off all the profitable business of telecommunications leaving BT as a sort of runt utility company unable to make a profit, I don't know in that respect I think the campaign was actually quite successful. If you look at, it's actually Section 3 of the 1984 Telecommunications Act, that section of the act actually lays down certain universal service obligations of BT and we were heavily responsible for the terms of that section of the Act and that protected a lot of jobs for a long time...' (interview BTV22).
Connects' greatest achievement is considered by one branch activist to be the retention of a voluntary nature to the redundancy programmes offered by BT. He felt very strongly that without a union, the redundancies would have been compulsory (participant, focus group BTG3).
§ APESMA
In contrast with the decline in membership experienced by many other Australian unions during the last decade, APESMA's membership has increased in size every year since 1995 and stands currently at almost 25,000 (see table 4). This achievement has been attributed to the active recruitment of members (particularly in non-traditional areas of employment), a greater focus on retention through the provision of non-industrial services (including professional development), as well as the maintenance of the traditional industrial role of the union.
Table 4: Membership Figures of APESMA
| Year ending | Total |
| 1992 | 17,494 |
| 1993 | 17,801 |
| 1994 | 17,093 |
| 1995 | 16,532 |
| 1996 | 17.023 |
| 1997 | 19,522 |
| 1998 | 22,269 |
| 1999 | 24,441 |
| 2000 | 24,575 |
| 2001 | 24,707 |
(Source: Personal Email from Research Assistant, APESMA 2001)
Moreover, with around 40 per cent of its membership on individual contracts (Bachelard, 1999), APESMA has recognised the need to address the challenge of individualisation in the workplace and to act strategically in recruiting and retaining union members. According to the Executive Director of APESMA, John Vines:
'...We see that our role is to support our members in their careers, and that means that we will represent them collectively, if that's available to us and that's our preference, but we will also represent them individually, and in particular, provide support to them in their individual employment situations. Most people are working as individual contractors or...(on) other individual employment contracts, don't want the union to negotiate on their behalf, but they do want to access from the union the credible information which they in turn can use in their own negotiations. And so, that's certainly a very legitimate role for the union, as we have tried to position ourselves into an organisation that supports our members in their careers, I guess we have tried to broaden the scope of the services and the support we provide...' (interview TEV1)
An industrial negotiator for APESMA expressed regret concerning the development towards 'individualism', and attributed this to the wider changes in society, with the increased emphasis on 'material success'. He saw however, that APESMA needed to offer non-industrial services in order to survive (informal conversation). This focus on members needs has been the primary drive of APESMA's strategy:
'...the reduced role of the AIRC and the increasing use of individual employment contracts caused APESMA to investigate ways of more effectively assisting members not reliant on 'paid rate' awards. A major development...has been the expansions of the Associations' remuneration surveys...'
(source: Vines, 1996:10)
The strategic course chosen by the leaders of APESMA has at times been controversial and has lead to difficulties with other Australian unions. One example of this was APESMA's rejection of the Australian Confederation of Trade Unions' (ACTU) strategy of union amalgamation. Since the later 1980s union consolidation in Australia has involved the merging of craft- or occupational-based unions into multi-skill or industry-wide unions, or loose groupings of unions. It was hoped that rationalisation would facilitate enterprise bargaining and aid discussions between unions and management on the introduction of workforce flexibility. Many commentators and other union offcials predicted APESMA would be forced to amalgamate with one of the much large unions, however APESMA argued that their members had special interests which could not be served in a mass union. The dis-amalgamation of the Professional Officers Association (Victoria) or the POA (V) from the Community and Public Sector Union (CPSU) is good illustration of this.
The POA (V) amalgamated with the CPSU in 1992, as part of the ACTU drive towards the creation of larger unions. In 2001, APESMA helped the group of Victoria based professional employees to break away from the CPSU after it became apparent that the professional employees' interests were being neglected at the bargaining table (participant, focus group TEV1). Because of the nature of their work, professionals are not able to use strike as an effective weapon ('we could go on strike and it would be six months before anyone noticed the impact', participant, focus group TEV1). Therefore, any case has to be argued at an intellectual level, and the union has to talk in terms of damage that could be made to the bottom line: 'threats to future profitability', 'looking at staff as a strategic asset' and so on. The larger unions do not have to advance an intellectual argument, as they have large numbers of staff working in revenue generating areas. They are able to 'wield industrial muscle' (participant, focus group TEV1). Because the CPSU had greater weight in voting than the POA (V), very often the professionals were voted against. In one round of negotiations (1996/7), an allowance that was paid to professionals was even traded off by the CPSU, in exchange for a pay rise for other CPSU members (participant, focus group TEV1). The POA (V) eventually split from the CPSU earlier this year and will eventually amalgamate with APESMA.
In the 2000 member services survey report, APESMA identified that the three services to have been used most often by APESMA members are the Presidential Card, which gives discounts accommodation, general entertainment and tourist attractions (62.6 per cent), remuneration surveys, which allow members to benchmark their wages (59.3 per cent) and industrial advice (53.8 per cent). This shows that servicing is in fact a very important factor in union membership. Vines is on record as saying that he sees APESMA as a 'service organisation' (Bachelard, 1999), however, the union also engages very heavily in organising:
'...APESMA offers new members a three month free membership in a "try before you buy" approach...It recruits heavily in universities, with 12,000 'affiliate' members who are students and pay no fees. About 35 percent of those become full members...'(Bachelard, 1999)
Until the 1990s only twelve positions (those of the CEO and direct reports) were exempt from industrial awards in Telstra. Moreover the company generally had a harmonious relationship with the unions and 'spent a lot of time and money on communicating, consulting, and negotiating with union representatives...' (Bamber, Shadur and Simmons 1997:134). During the mid 1990s, Telstra together with the unions representing the Telstra workforce, pursued what was known as the 'participative approach'. However, by the time the Howard government had been elected in 1996, this had been effectively abandoned. APESMA's relationship with Telstra worsened considerably during the late 1990s. Telstra has, for example, made use of Workplace Relations Act 1996, to require unions to give notice before entering company premises (TEV2, TEV6). Since Telstra's part privatisation, it has more of a private sector approach to managing industrial relations within the company, which has become quite aggressive (TEV7, TEV6).
Like Connect, APESMA is also involved in international alliances and makes use of its contacts in other countries in order to develop best practice. One example of this was the union committee's visit to New Zealand in 1991. It was decided that the changes which had occurred in the New Zealand environment (telecommunications liberalisation and the general pursuit of a neo-liberal agenda) would also happen in Australia. Therefore in order to plan effectively for the coming changes, a delegation spoke with representatives from various organisations in New Zealand (including Telecom Corporation of New Zealand, the Post Office Union and New Zealand Public Service Association) and reported back to the rest of the union as part of a wider strategic planning process for the forthcoming developments in Australia. The Executive Director of APESMA, John Vines also holds a position in the organisation UNI, and through this is able to influence governmental and industrial bodies on issues with direct concern for the telecommunications industry. For members working overseas, APESMA and Connect have signed a mutual assistance agreement. This has increased the benefits of union membership, as a British Connect member working in Australia is eligible to be represented by APESMA, and vice versa. In a presentation to Connect Executive Council members, Vines spoke of his vision of the future of the labour movement. He felt there would be an increased global ownership of companies which would lead to the development of an international labour market. Vines asserted that there ought to therefore be the ability to link professional unions and members over the internet and that procedures ought to be established in order to conduct negotiations on a global basis. Finally, Vines felt that unions should work towards providing an international package of member services and that there ought to be closer relationships between international unions - perhaps even leading to international mergers (TEO1).
Evaluation and Conclusion: The Strategic Behaviour of Telecommunications Unions
According to Katz (1997a) the are three models of telecommunications restructuring. In this paper, it has been demonstrated that even within the one model of what he calls 'Anglo-Saxon' restructuring, there are significant differences. Fairbrother (1998:174) criticises Katz' edited book for not paying significant attention to the political context of restructuring. The political context has been shown in this research to be extremely significant for workers and their representative bodies in the telecommunications industry. Moreover, this finding also contradicts Ohmae's (1990) thesis about the diminishing role of the state. In both Britain and Australia, changes in the industrial relations environment were determined by the ideological persuasion of the government. This not only affected the legislation that was passed, but also reflected (or influenced?) broader societal opinions on industrial relations issues. A broader examination of the political economy of telecommunications restructuring has been outside the scope of this research. Instead, the influence that the state has on telecommunications unionism has been discussed, insofar at it has affected union strategy formation. It has been shown, that it is imperative that unions are able to influence their wider environment, as part of their wider strategy of survival.
Organisational restructuring has provided both challenge and opportunity for managerial unions in the telecommunications industry. Connect and APESMA have developed strategies proactively in order to cope with an environment which had become more hostile to managerial unionism than hitherto in the past. This argument was developed through an examination of three areas. Firstly, the organisational restructuring of BT and Telstra was placed within a wider context of the changes taking place in the global telecommunications industry. Secondly, the effect of these changes on the careers of managers and professionals in BT and Telstra was focused on. In particular, these employees' perceptions of the value of union membership was focussed on. Thirdly, the direct effects of organisational restructuring on unions themselves was discussed, as well as the strategies that the unions have pursued in order to ensure survival. Connect and APESMA have sought to become more relevant to their members through the provision of non-industrial as well as industrial services. Both unions are also catering more closely for the individual and focussing less on a 'collective' identity for the membership. Similarly, it can be seen that, when the environment is favourable, Connect and APESMA prefer to pursue a 'partnership' or 'participative' approach with the companies that recognise them.
Both unions have formed links with international labour organisations, as well as exercised their voice on behalf of members inside the political sphere in order to have an influence on the environment within which they operate. Therefore unions have had to go beyond their traditional role of providing a collective voice for their members, and judging by the growth in membership, it would appear that Connect and APESMA have successfully done so.
Endnotes:
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ACTU Australian Confederation of Trade Unions
AIRC Australian Industrial Relations Commission
AOTC Australian and Overseas Telecommunications Corporation
APESMA Association of Professionals, Engineers, Scientists and Managers, Australia
AT&T American Telephone and Telegraph
AUSTEL Australian Telecommunications Authority
AWA Australian Workplace Agreement
BT British Telecommunications, plc
CEPU Communications, Electrical and Plumbing Union
CPSU Community and Public Sector Union
CWA Communication Workers of America
CWU Communications Workers Union
EC Executive Council
EU European Union
ILO International Labour Organisation
MFEA Managers and Financial Executives Association
MPG Managerial and Professional Grade
NTT Nippon Telegraph and Telephone Corporation
OFTEL Office of Telecommunications
PCG Personal Contract Grade
POA (V) Professional Officers' Association (Victoria)
PSG Professional Sales Grade
PTO Public Telecommunications Operators
STE Society of Telecoms Executives
UNI Union Network International
VR Voluntary Redundancy
WTO World Trade Organisation
please send comments to sharon
last updated September 2001