The ABC has withdrawn a 4% pay increase offer made to staff, citing a “dramatic change to economic conditions”.

The union is describing the renege as a demonstration of “incompetence at the most senior levels of the ABC”, and ABC Managing Director Mark Scott has acknowledged to staff that there was “not sufficient clarity and precision” in negotiations and that this was “disappointing and unsatisfactory”.

For those of us who are not ABC staff members, the question must surely be how this has happened and what economic conditions in public broadcasting caused management to withdraw an offer.

It will be feared this is a signal the ABC is expecting harsh treatment in the Budget.

But the union believes that the cause was insufficient consultation at senior management levels, followed by intervention by the ABC Board.
Union meetings are being held at the ABC this week and will consider, among other options, going to court to try and enforce the offer. The union documents concede that options are limited, with court action to enforce the offer likely to take too long and have little benefit.

Graeme Thompson, Secretary of the ABC Section of the Community and Public Sector Union, has describes the withdrawal of the offer as “extraordinary” in a bulletin to members. (For copies of all the key documents in this case, see my blog). The bulletin says:

Why did Management Do It? We don’t know. There is speculation that the Managing Director failed to consult with other senior management including the Chief Operating Officer about the offer. There is also speculation that the ABC Board has intervened and has directed Mark Scott to withdraw the offer. The renege demonstrates a level of incompetence at the most senior levels of the ABC that is difficult to comprehend. Had any of our members committed such a fundamental breach of their duties it is dead certain they would have faced a misconduct investigation and would have been keelhauled.

It is ironic that at a time when management are rolling out new ABC Values based on respect, integrity, trust and honesty they have demonstrated the most fundamental lack of respect to their staff.

Meanwhile in an email to staff sent this Wednesday, Mark Scott said: “I don’t think there was bad faith by negotiators on either side, simply a lack of precision in the detail on what wage increases would be available and affordable when. I think we agreed to take all steps to ensure there can be no repetition of the current disparity of views around the shape and detail of a pay offer.”

Thompson insists the lack of clarity was not on the union’s side, and there is a clear paper trail proving the offer was made, and that management wanted it put to staff.

He says the offer — for a 4% increase from 1 April this year — was made in August last year. He didn’t think the offer was sufficient, but agreed to take it to staff, without a firm recommendation.

But just before Christmas, ABC Director of People and Learning, Kate Dundas wrote a letter to the Media Entertainment and Arts Alliance and the CPSU, saying: “It is clear that since the discussions in August and subsequently, the economic circumstances have changed dramatically. The ABC cannot responsibly commit to an across the board wage increase of 4% from 1 April 2009.”

Instead, management offered a 1% payment from April to June, and an across-the-board wage increase of 4% from July, with negotiations on performance management and work levels.

In January, Thompson sent a long letter to ABC Managing Director Mark Scott, pleading with him to reconsider, saying the renege was doing huge damage to the corporation’s relationship with its staff and laying out in exhaustive detail the course of negotiations from the union’s point of view.

On Wednesday of this week, Scott emailed staff, putting management’s reduced offer and saying:

I think this proposal is fair to staff and provides certainty in these economically uncertain times. With inflation now at 3.7% and expected to fall further in coming months, it represents payments above the expected CPI level over the rest of the extended agreement term. I think it will compare well to industry agreements reached in coming months as inflation falls and unemployment rises…The economic conditions have deteriorated further since December when we put this specific proposal before the Union. It is all we can afford but I believe it is highly competitive and represents good value.

In his bulletin to members, Thompson lays out three options: trying to enforce the original offer through the courts, accepting the reduced offer, or rejecting it and pressing for the original offer to be reinstated. All the options carry risks.

Court action “is not a matter of evidence … there is a clear paper trail proving the offer was made” but the process would be lengthy and would tie hands in negotiations.

Accepting the offer also carried risks, because “management has acted dishonourably” and might do so again. “Our failure to challenge them does not hold them accountable for their behaviour and it encourages them to act dishonourably in the future.” But Thompson concedes that with the economy in decline, “The reduced offer may still end up looking OK”.

Rejecting the offer also carried the risk that it would delay a wage increase, and there was no guarantee than the outcome of negotiations would be favourable.

Mark Scott was in transit this morning, and not available for comment.