Telecom NZ engineers strike

Industrial action by the Engineering, Printing and Manufacturing Union (EPMU) in New Zealand has seen over a hundred engineers on Auckland's North Shore walk out of their jobs in a lightning strike.

The union says the strike action is in protest over Telecom New Zealand's move to make engineers in the most populous part of the country become what it calls dependent contractors.

The striking workers are employed by Telecom contractor Transfield, and cover Auckland's North Shore region, where telecommunications products and services provisioning could be delayed indefinitely as a result.

Behind the strike is Telecom New Zealand's controversial decision to award Australian company Visionstream the contract for its network infrastructure in Auckland and the northern parts of the country.

Downers EDI and Transfield held the contracts for the area previously, but as they lost these, the engineers they employed were issued redundancy notices. Visionstream has said it wants to retain the engineers, but as owner-operators running their own businesses as self-employed contractors.

The decision affects some 900 engineers, who will be required to buy or lease their own vans and tools, costing at least NZ$20,000.

The union has termed that offer as forcing former employees to buy back their jobs, and says it will lead to much lower earnings and increased responsibilities for its members. Supporting the union's claims, a report prepared for some of its members by tax consultants Acura Accountants Ltd in Kerikeri, shows that engineers taking up the owner-operator option may see their income drop by between a half and two-thirds.

Acura said: "It is possible that some contractors will be unable to complete the required jobs to earn even minimum wage." By law, the New Zealand minimum wage for adults is NZ$12.50 an hour.

An example given to ZDNet.com.au by a contractor states a typical fault job outside the main cities would pay a flat rate of NZ$65. Resolving the fault would entail four hours of work digging up underground cables. If more than one contractor was required for the job, s/he would have to share the NZ$65. Costs incurred include fuel and materials.

Telecom Chorus spokesman Robin Kelly referred ZDNet.com.au to a letter by Visionstream general manager Andrew Stevens, that refuted the Acura claims. According to Stevens, Acura used the wrong price codes, didn't include allowances for time and materials, and made erroneous assumptions as to productivity levels by contractors.

Acura also failed to take into consideration back office support, Stevens said, as well as start-up grants, non-exclusivity of agreements and other benefits and training.

Opposition Labour party MP Clare Curran attacked the decision to turn formerly employed engineers into owner-operators, saying it will jeopardise the ruling National Party's NZ$1.5 billion fibre-to-the premises broadband plan.

Curran said she had received a steady stream of letters and emails from technicians with decades of experience fearing that they will be forced out of the industry by Telecom's decision.

There may be more industrial action to come: EPMU national secretary Andrew Little said "our members have had a gutsful of Telecom. They are determined to fight back with sporadic strike actions around the country over the next few weeks."

Monday and Tuesday this week saw a two-day strike in Northland by Downer EDI workers, which followed national strike action by Transfield employees a week and a half ago.