Australian bosses say job losses inevitable after pay cut refusal

Academics’ refusal to accept salary cuts during the pandemic will cost hundreds of jobs that might have been saved, Australian university bosses have warned.

University of Melbourne vice-chancellor Duncan Maskell said staff rejection of cost-cutting proposals, which included a voluntary separation scheme and the cancellation of last month’s 2.2 per cent pay rise, would result in between 200 and 300 forced redundancies.

The plan, which could have saved the university some A$30 million (£16.4 million), required staff approval of variations to the university’s enterprise agreement. Almost 5,200 voted against the changes, with just 2,900 in favour.

Professor Maskell said the outcome would not stop the university from riding out the pandemic’s financial impacts, but would make workforce reductions “inevitable”.

University industrial negotiations have become increasingly acrimonious following widespread rejection of the jobs protection framework thrashed out by several vice-chancellors and the National Tertiary Education Union (NTEU).

The framework would have allowed universities to temporarily reduce their workforce expenses – by cutting pay rates and working hours, for example – in return for extra guarantees over the job security of their staff. It could only be applied at institutions where both staff and management had given approval.

Melbourne management refused to sign up to the framework, leading NTEU branch members to vow not to accept any cost-savings proposals that had been “crafted without input from the union”.

NTEU president Alison Barnes said Melbourne’s proposal was “an aggressive and gratuitous assault” on staff pay, conditions and jobs. She said the university had not been transparent about its finances or cooperated with the union or staff. “Instead, it unilaterally sought to demolish jobs, conditions and pay without a shred of supporting evidence.

“This result sends an important message to other universities. We have negotiated a framework which allows for temporary pay reductions to save jobs, provided vice-chancellors are transparent about their finances and open to cooperative negotiation.”

Union members at La Trobe University, where management has signed up to the framework, have voted to approve salary cuts that could save 225 jobs. NTEU members at the University of Tasmania have also approved savings measures proposed under the framework, ahead of a vote of all staff.

But no such agreement has been reached at the University of Wollongong. Its management rejected the framework before proposing three savings alternatives: pay cuts of up to 10 per cent for 18 months; steeper cuts for a shorter period; or no change to the enterprise agreement.

Union members support the third option, with other staff likely to vote likewise in a three-day poll that concludes on 12 June. The university warned that this would inevitably lead to redundancies and “lapsing” employment contracts.

“As each option yields progressively less savings in staff-related expenses, so the potential for job losses grows with each option,” the university said in a statement.

The vote at Wollongong opened on the same day that credit ratings agency Standard & Poor’s downgraded the university’s outlook from stable to negative because of the impact of Covid-19.

Chief operating officer Damien Israel said the outlook warning highlighted the risks to the university’s financial footing. “[It] adds to the case for immediate action…to restore the institution to a financially sustainable position.”

john.ross@timeshighereducation.com