%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% On 19/08/13 3:24 AM, Michael Spence wrote: Thanks. I agree. The challenges that we have been facing (both internal and external) are huge, and people need time soon for a bit of healing. Michael Michael Spence Vice-Chancellor and Principal The University of Sydney %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% From: Andrew Mathas <andrew.mathas@sydney.edu.au> Organization: University of Sydney Reply-To: Andrew Mathas <andrew.mathas@sydney.edu.au> Date: Monday, 19 August 2013 6:29 AM To: Michael Spence <michael.spence@sydney.edu.au> Cc: Ann Brewer <ann.brewer@sydney.edu.au> Subject: Re: Further information on University’s proposed EA Dear Michael, Thank you for taking the time to reply. I agree with your comments about executive salaries. It would be good to publicise this more, although it is a difficult argument from your side because most people will be distracted by the size of bonuses that are being offered, especially when compared with what happens in similar institutions in the US and in Europe. I am afraid that I disagree with your justification for withdrawing the offer of backdating pay on August 30. If the university has the money now to backdate salaries then it will certainly have the funds to backdate them in future because the any additional funds necessary would be paid out in salaries if the deal were signed now. Although I can appreciate that the university would not to carry this liability indefinitely, I do not see this as reasonable justification for withdrawing the offer in two weeks. Thank you again for your quick reply. Like you I do hope that this matter can be settled soon so that we can all return to our core duties of teaching and research. The past few years have been a difficult time for everyone at the university. Here I really do mean everyone, whether they are working in the gardens, at the chalk face or in management. As you said, the future for universities in Australia is, at best, looking uncertain. On the other hand, as far as I have witnessed morale in the university is at an all time low. Once the EBA is finalised I hope that it is possible to take some positive moves to address this as I think it is very necessary. I am aware of several departments, both academic and administrative, losing good people and I think that it is vital that we turn this around. With best regards, Andrew %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% On 16/08/13 5:18 AM, Michael Spence wrote: Dear Andrew, Thanks for this message. I am sorry if you have found our communications either illogical or brutal. We have tried to make them straightforward, but it is a very noisy environment in which to communicate. You raise two issues, the first is the question of backdating and the second the question of executive pay rises. On the first issue, the point is that the impact of backpay, as a single lump sum, grows as time goes on. We currently have the cash to pay backpay to 1 July 2013. But this dispute might go on for another year. [I don’t want that, but I have been completely honest about our financial situation and the amount of money that we have available. The unions don’t agree and we are at an impasse about quantum. I am still open to negotiation about how the quantum might be distributed, but the total quantum is a fixed amount.] If the dispute were to go on for, say, another year, then the amount of backpay that we would have to pay as a single lump sum would be very great indeed. Of course, we could make provision for that in our budget planning. But I think that that would be hard to do, given the uncertainties on the funding side. I would then be making a commitment to a particular ongoing accruing liability, with no certainty as to the resources that I would have to meet it. That is the sense in which I think a commitment to backpay extending indefinitely would be irresponsible. We really do live that hand to mouth! As for the issue of executive pay, in fact the Deans and other senior executives did not get any pay rise in 2012 and, with a few exceptions for particular circumstances, have not had any pay rise in 2013. So we have already taken the step for which you have asked. But, beyond that, it is important to know that we pitch executive pay at the 75% point on the scale of Go8 comparators. We pitch salaries for staff more generally at the 100% point. In short our executives are not the best paid in the sector and our staff are. That seems right to me. You may have seen the NTEU study that puts my own salary at 10th in the country, below that of the Vice-Chancellors of much smaller and less complex institutions. That is fine by me: I am extremely generously paid. But I do need to recruit good Deans and other senior staff and paying them less than about 75% of the Go8 comparators would probably make us uncompetitive. I understand the sensitivities here, though, and think that we do really need to be careful about executive pay. Thanks for writing to me and giving me the chance to outline my understanding in relation to these issues. I think both the question of communications and executive pay are really important to get right. Yours Michael Michael Spence Vice-Chancellor and Principal The University of Sydney %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% From: Andrew Mathas <andrew.mathas@sydney.edu.au> Organization: University of Sydney Reply-To: Andrew Mathas <andrew.mathas@sydney.edu.au> Date: Thursday, 15 August 2013 10:46 PM To: Michael Spence <michael.spence@sydney.edu.au> Cc: Ann Brewer <ann.brewer@sydney.edu.au> Subject: Re: Further information on University’s proposed EA On 15/08/13 8:38 AM, Michael Spence wrote: This was not "brinkmanship". It would be irresponsible to give any undertakings about backpay that would have effect after the federal election. There is a very real chance that our budget will be cut further by an incoming government and so, while I am absolutely committed to the 2.9 percent, I cannot guarantee any backpay at all after the election. These are tough times and I do not think that is understood by the local branch leadership. Dear Michael, I accept that Australian university budgets are tight and I agree with you that the union’s insistence on a 4% pay rise is unrealistic given Australia’s current economic outlook. This said, I have found managements’ arguments during the enterprise bargaining process to be frustrating, both because they have often been illogical and because of the occasional brutality in expression - for example, some of the rhetoric from the executive over planned strike action bore a strong resemblance to the rantings of a school yard bully. It has not been to anyone’s benefit that much of this debate, from both side, has been conducted outside of the friendly collegial framework which you aspired to when you were first appointed. Against this backdrop I have to take exception to your paragraph above. As you said, university management is fully aware that there will be an election soon and that this will probably have a negative impact on our budget. Being cognisant of this fact, any competent management team would take this into account when offering a pay rise, whether or not it was backdated. It makes no sense to pretend that the election affects the offer to backdate this pay rise because your calculations should already anticipate the effects of the election. It would be reasonable to say that budget changes after the election may be worse than expected, with the result that the university cannot afford to backdate the pay rise, but if you seriously believe this then you should not be offering to backdate any pay rise now. Your withdrawing the offer to backdate the pay rise one week before the election, and probably a month before any budget changes will be announced, comes across as another backhanded bargaining ploy. As I said above, I think that the unions demand for a 4% pay rise is unrealistic. It would help in convincing my colleagues of this if you and the rest of the executive agreed to similarly restrict your own pay increases and to forgo any bonuses whilst our budget strictures remain tight. This would also be fair and reasonable by any standards. On a previous occasion when this was suggested to you you replied by saying that "such staff, however, may have a contractual entitlement to a performance-related bonus as part of their conditions of employment". This is disingenuous. The executive could, if they wished, release the university from these obligations and agree to reduced salary increases and to a pause in the payment of bonuses. Given the high level of dissatisfaction with university management reported in recent surveys I think that this is something that you should be considering anyway. In any case, agreeing to restrict your salaries and bonuses would remove one of the union’s most emotive arguments and it would help to convince my colleagues that we honestly cannot afford a larger pay rise. I sincerely hope that the enterprise bargaining processes can be brought to a conclusion soon. In my experience it has never taken so long to reach agreement and this long drawn-out process is proving to be very damaging for morale, particularly for younger members of staff. It is in everyone’s interests to bring this to a conclusion as quickly as possible. With best regards, Andrew