Andrew Mathas’ correspondence with the VC

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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 

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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 

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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 

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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