Employees of HP Enterprise Services, formerly known as EDS, have now mainly moved onto new HP contracts with equivalent conditions, according to the integrator's most active union, the Association of Professional Engineers, Scientists and Managers, Australia (APESMA).
The employees were asked to sign contracts from around September, according to APESMA director of industrial relations Michael Butler. The signatures would mainly have been collected by now, he said. According to a spokesperson for HP, full legal integration including employee transition was completed by 1 November 2009.
Originally there had been some concerns that new contracts would mean worse conditions. The union said in a bulletin earlier this year that management had been speaking about moving employees into an off-shore company on lower pay and working conditions without recognising previous years of service or accrued leave.
"The issue stemmed from [HP's] belief that by the offer of new contracts they could basically wipe the slate clean," Butler told ZDNet.com.au.
However, doing so wasn't allowed under the Fair Work Act, according to Butler, a fact around which the union rallied with success.
"Under these rules, if you are transferred from one business to another (for example as part of a corporate takeover) and if you are retained to do substantially the same work as before, then your new employer must maintain your previous working conditions and entitlements and recognise all of your accrued leave entitlements," APESMA said in a bulletin.
HP conceded to the rules after deliberations, APESMA said, so that the current EDS agreement was transferred in its entirety, salary was preserved, the entire period of service was to be recognised, and individual redundancy and severance arrangements were to carry over. The association was very happy with the outcome.
HP was a little more cryptic on the transition. "The job migration process ensured that EDS jobs were mapped and aligned to HP jobs and salary structures. This enables HP to effectively drive its pay-for-performance strategy with a consistent job-based foundation for rewards, development and organisation planning," the HP spokesperson said.
The EDS brand has now been retired, with HP making the decision to end its life just over a month ago.
HP's description of the process for aligning salaries is consistent with how HP has always managed salary, with global competency sets and local pay banding.
In my personal experience of the Compaq merger, some people at Compaq were paid way more than their colleagues at HP for the same kind of work and capability, typically on long term contracts. Over time these inconsistencies were "ironed out" through performance management, at least for those who were willing to stick it out with HP. Many did not. Some of the losses were regrettable but others were not so regrettable.
Much of Compaq's business was unprofitable and as the new owner HP had an obligation to shareholders to turn that around. EDS is no different - the company was not travelling well which is why they were vulnerable.
Mark Hurd (HP CEO) is renowned for his relentless focus on cost cutting and this will be no different. The test of this integration will be if he can sharpen up the EDS culture which had become complacent over the years. At the same time he would do well to recapture the hearts and minds of HP people who have become disillusioned over the years!