The geeks fight back

Class struggle in the software industry


(This is a chapter from an Honours thesis entitled: ‘The Geeks Fight Back: Prospects for Working Conditions and Unionism in the Software Development Sector’, University of New South Wales in December 2002. It was based largely on personal interviews with participants. The complete bibliography for the thesis is also attached.)

This case study looks at a single workplace, the Software Systems Centre (SSC). SSC was part of a large Japanese multinational corporation, Global Systems. Global Systems is not a software company. It divides its operations between the production of heavy duty electrical apparatus, consumer products, and communications and electronic equipment. Global Systems’ heavy machinery branch is divided into an industrial and a power division. The industrial division manufactures large machines to operate paper mills, for example. Workers at SSC were employed to develop software for the power division. Most software was used for monitoring and control systems in Japanese power stations. For example, software written by SSC workers could allow workers in Japan to operate power stations through a system of touch screens.

SSC was established in 1989 as a separate department within Global Systems’ Sydney operations and was closed in March 2000. It primarily employed software engineers, but also employed technical writers, who compiled computer documentation, and network and systems administrators. It was a small workplace, employing no more than 22 workers at any one time, and was an autonomous division of a much larger workplace of around 200 Global Systems employees, including engineers, mechanics, and workers in administration, sales, and transport.

‘Angry geeks down mouses in industry first’

This was the headline in WorkersOnline, the NSW Trades and Labor Council’s website, on 9 April 1999. Three days earlier SSC workers had ‘downed mouses’ after management ordered them to release software to meet a deadline for a system due to be sent to Japan.

The action came after nine months of negotiations with Global Systems management. The workers had already decided not to release software because management were unwilling to certify an enterprise agreement with their union, the Australian Services Union (ASU). Management emailed instructions to each worker that, under the relevant clauses of the Workplace Relations Act, by refusing to obey a specific order from management, in this case to release software, they were deemed to be taking industrial action and would no longer be paid. After receiving the email, the workers walked off the job. According to the union organiser ‘The bosses just couldn’t believe it. Neither could the media when we told them’. The Financial Review’s Stephen Long wrote ‘It was a case of the geeks fight back...The strike was the first by IT professionals in Australia - possibly the world’.

This case study explains why the SSC workers ‘fought back’. It looks at the working conditions at SSC, the period of negotiation with management, the industrial action taken by the workers, and the approach taken by management.

Working conditions at SSC

I think [the union’s] attitude probably is that these people get paid well. They get looked after well, they probably don’t want to be in a union. That wasn’t my attitude necessarily, even though I did have a prejudice into thinking software people tended to be paid a lot. And I got a shock when I saw how they were paid for what they were doing, I thought it was really appalling.

SSC was certainly not a bad place to work. There was a lot of good conditions there [such as] flexibility in hours. The basic environment wasn’t bad. However, being part of a Japanese company, there was a cultural aspect coming from Japanese management, who we worked directly for, which was sort of pushed on to us, not at gunpoint, but expectations were there which some people along the way thought were not quite fair and reasonable. Most of those go down to hours, what constitutes a reasonable length of a day, or reasonable length of a week.

Established in 1989, SSC was initially supervised by an Australian manager. According to one worker ‘From what I’ve heard the benefits were pretty good. Little benefits, like when you had a birthday they used to buy you cakes and all that’. A worker who arrived in SSC just before the Australian manager left said ‘there was quite a bit of money to spend. Christmas parties were good, and if you wanted to take time off in lieu for overtime you’d done, you could’. Another worker argued ‘I think prior to the new blood coming in like me, there had been a few people who’d enjoyed a cosy relationship with management. They would take people out to lunch. It was a bit more cosy, but I guess there was a degree of not really realising there were separate interests involved’.

In 1995 Global Systems sent a Japanese manager to supervise SSC. Around this time working conditions began to deteriorate, with the workload and hours increasing. One worker argued:

The projects that we would do were really long, really complex systems, that would take ages, twelve months, to do. The deadlines weren’t really tight on a week to week basis in general so everyone was just fine. People would work their 35 or 40 hours. People would do a little bit of overtime, some got paid, some not. Then there was this project in Toyama, Japan and suddenly there were deadlines over a period of a couple of months. People were having to do heaps of hours.

The pressure was made worse by the short period of time to test the software in Japanese power stations. As power stations have to be running most of the time, there is great pressure to test new systems during the infrequent periods when they are partially shut down for periodic maintenance. Software engineers responsible for the systems had to release the software by a specific deadline. If the software did not work or contained mistakes, there was even greater pressure to ‘de-bug the code’ and re-release the software within the fortnight or so when the power station was not fully operational.

During the Toyama project some SSC staff were even required to travel to Japan to help test the software. The hours in Japan were even longer:

I actually went to Japan for a month to work at the actual site. I would sometimes have to do, just because I was there, 70 hours a week. I was obviously pissed off with that because it was double [what I normally did]. We were working in conjunction with Japanese workers who were doing a similar kind of job. They had a system of overtime with penalty rates.

In fact, the Japanese overtime system was capped at a set number of hours each month, which was easy to exceed during deadline periods. At the same time software engineers were working excessive hours in Japan, engineers at SSC were also working above the normal number of hours. Between 50 and 60 hours per week was a common figure for the software engineers involved in the project.

A number of factors made the long hours even worse for SSC staff.

Workplace culture

Management had a ‘get the job done’ attitude and exploited the professional attitude of the workers. One software team leader said:

In order to do the job you need to spend a reasonable amount of time by yourself researching things...But I think unless that’s recognised and unless there’s some way of qualifying that so that people can legitimately do those things within the context of a working week I think people are inevitably going to be working extra hours simply because they’ve spent too long maybe finding out something whether they feel guilty about that because they haven’t got appropriate authorisation. I always used to say to my staff [on my team], go and find out about it, don’t spend more than half a day on it. If you think you need more than half a day come and see me. But that was me, and it was unofficial and I would slot that into time. I’d lose it somewhere in the schedule. Not many people are prepared to do that. I think that without it, more and more people are going to be working extra hours because...there’s a feeling of insecurity with a lot of people, probably because of high job turnover. You’re going into new jobs or you’ve got a young whizz-kid half your age who thinks he knows twice as much as you. The only way you seen to be performing is by putting in the extra hours and learning what it is you think you need to know.

I think there’s a lot of people out there who are scared to let on what they don’t know, not because they’re scared of losing their jobs necessarily, but I think people are scared of not moving in their careers, of being left behind. They begin to reach into a new technology that’s not booming as quickly as another and it is a real desire for people to learn these new skills. They may not be directly relevant to their jobs, they can’t justify the time spent to their employer and they have to do it themselves in their own time. Now whether you call that extra hours or not, it still means people are in the workplace for longer, spending longer at a terminal or…doing stuff they feel is potentially beneficial to their career.

He also argued:

The system of [performance] appraisal was tied to salaries and there was this issue of working extra hours shown to be beneficial in your pay packet and those sorts of things. And people didn’t feel that was fair, which it isn’t…I guess you could call it bolstering their careers, when it came to review time or salary performance, if they put in the extra hours and were seen to be finishing their projects in a certain time [they would be rewarded]. There was this tie in between performance reviews, salaries and the perceived certainty of being able to produce something within a desired timeframe. Anyone who was concerned about their careers would work the extra hours to achieve it.

In other words, the desire among IT professionals to advance their careers led them to work extra hours and strive ‘above and beyond the call of duty’. Management took advantage of this, in a formal capacity, by linking performance appraisal and salaries to the number of hours worked, and informally, by encouraging workers to undertake research and project work outside normal working hours. With the arrival of the first Japanese manager, this led to tension in the workplace. One software engineer explained:

His management style was primarily the cause of low morale and a sense of dissatisfaction. I think he was ambitious, but he was quite dictatorial. He would say you’re doing overtime for this, you’re staying behind to get that done, things like that. And I’m not sure if that was cultural differences, but I’m inclined to think not.

Erosion of staff benefits

With the arrival of the Japanese manager, many staff benefits were removed. Management began refusing staff time off in lieu for overtime they had worked during deadline periods. There was also an allowance paid to workers who spent time testing systems in Japan. Although not everyone at SSC was given the opportunity to travel to Japan, it was a significant factor in souring relations between management and the workers. One software team leader, who spent considerable time in Japan, explained:

We got all the accommodation paid for, and the flight. We’d basically claim those as a separate expense and then we got a daily allowance which was about $105. Basically, more than enough but not too much more than enough. You could easily spend it if you really wanted to working in Japan, but if you were reasonably economical you could come back, if you were overseas for a long amount of time, with quite a sizeable amount of money. Not a huge amount of money, but two or three hundred bucks in your pocket. Now we all felt that that was part of the [deal], even though it was a lurk or a perk or whatever. Almost without exception when you were over there you were working 12, 14, 16 hour days. [It was] almost an unofficial overtime payment as it were. Aside from the fact that there were long hours, the working conditions weren’t very nice over there either.

Early in 1998 Global Systems management replaced the allowance with a ‘keep the receipts type system’ in which workers were not paid an up-front allowance, and instead had to keep the receipts of their daily expenses which would be reimbursed back in Australia. Management capped the daily amount workers could claim at a similar level to the old allowance, but, nonetheless, some workers felt they were disadvantaged if they lost receipts, or because they had less money while in Japan.

Hiring of staff

From the mid 1990s, changes occurred in the hiring of staff. First, management began hiring more staff, until they had about 22 workers, then went through a long phase of not replacing staff who had left. Second, they began to hire much younger, more inexperienced staff. The new workers were often straight out of university, and were employed on inferior wages and conditions to many of their senior colleagues. They were also employed as contractors. I will deal with each of these issues in turn.

The first issue is the number of staff; After increasing staff numbers over a couple of years, management began not replacing workers who left. According to one worker:

I reckon they must have been talking about closing down in 1998...because they’d been not replacing staff for quite a while before we started getting active. And that was one of the reasons we started getting active because we wanted to know why. Was the place going to be shut down, why weren’t there replacement staff, why wasn’t anything happening?

In the months leading up to the negotiations, two key staff members resigned, ‘not because there was any problem, but just because they had been there four or five years and that’s a long time in IT’. They were not replaced by management.

They weren’t bringing anybody in to learn all of the things, and they were losing people, really, really key people. So there was a lot of knowledge going out, and the people there couldn’t really take over because people already had their own jobs.

Another worker argued:

I guess it culminated in more work pressures. Because, from my point of view, when I see deadlines to be met, there are people working through weekends, extended hours and I think more than that. I mean [the Japanese manager] could have got more staff in.

One of the software team leaders said:

I think you could claim [hours got] progressively worse because I think we were expected to do the same level of work with less staff, and everyone could see that. We said ‘You’re looking at these projects for the next year, with exactly the same time-scale as before, with only half the people to do them. That means we’re all going to have to work 60 hour weeks’. And so, that was an issue. I think something of a culture of working long hours started to develop...I was there for about six and a half years...There was this notion of flexible working, but what it boiled down to was people used to stay back to find out stuff for themselves, a bit of research or whatever, and that was encouraged. But it became such that if you didn’t work back, you weren’t going to get the stuff done by the required end date....

Plus the technology, the planning was mainly done by the guys in Japan and they don’t have an appreciation of the technology or what’s required. Plus they look at it, they don’t look at the time that’s needed to finish it, they look at when it needs to be ready by. And they just chuck enough bodies at it to get it done....So to an extent that was imposed upon us. We had a reduced headcount because people were leaving and not being replaced. There was no adjustment to the timescale. Therefore...the only way we could’ve survived was doing the same amount of work with less people, making ourselves more economical with respect to a lot of things.

The second issue was the type of worker management recruited. ‘When they first hired people...they paid them really good for the amount of experience they had’. Another worker argued that before Japanese management took direct control over SSC, management

paid good money for good people, for those who are experienced and know what they are doing. The Japanese manager came over and said we’re not paying that sort of money, so they said we’ll just hire ten people straight from university, pay half the amount, train them up, and get the same amount of output.

All workers hired by Global Systems were required to sign a document guaranteeing non-disclosure of salary. Management also began hiring people on twelve month contracts. Under the contracts, workers were paid for overtime, but not for holidays or sick leave. Normally overtime would be paid for up to 40 hours a week, although management often gave approval to work in excess of this limit as deadlines approached. Many workers were concerned that their agreement not to disclose salaries made the process of performance appraisal and salary determination unfair. As one software engineer put it:

When it came to people’s salaries being reviewed and rewarded, of all the hard work done, it was always retrospective. So based upon some big effort you put in in the previous year you then could get some big increase...Non-disclosure of salary, which you were all forced to sign....meant that regardless of how many hours I put in compared to my peer, I didn’t know if he was being rewarded better than I was.

The union organiser pointed out that this process of individualising salary reviews meant management was able to pay workers a base of between $37,000 and $38,000 a year, much lower than the industry average. It also led to significant gender inequality in terms of overall remuneration.

The employment of new workers on contracts made the situation worse. Management began employing all new recruits initially on twelve month contracts, before offering them permanent positions. One software team leader pointed out:

Global Systems had this bright idea that to avoid employing someone who was no good they’d employ someone initially on a twelve month contract as a contractor, not on anything like market contract rates but on an hourly rate. After twelve months they’d make them permanent. That caused bad feeling because when [some employees] went to Japan, they were on an hourly rate, whereas [permanent staff] weren’t.

After initially employing new staff on contracts in the mid 1990s, management began offering staff new contracts after twelve months instead of permanent positions. According to the software engineer who eventually became the leading union delegate at SSC ‘They were trying to say how great the contracts were, I guess. You get paid for overtime and that’s really good, they said’.

For a couple of years a number of SSC staff remained on contracts. The IT industry is dominated by contractors, but it is important to understand the difference between workers who are normally regarded as contractors and the contracted workers at SSC.

In the IT and computer industry a lot of people are contractors who go and work for $50 a hour and go and run their own show for a three month contract. They tried to classify us as contractors. So people had an hourly rate and that was it. There was no paid leave or that kind of stuff. We did exactly the same work as the full time workers. People thought that was a bit dodgy, but we were told we were paid for every hour of work that we do....They also said Japan won’t let us hire more people, so we’re trying to get around it by hiring these contractors, which sounded dodgy right from the start.

It was also clear that SSC staff on contracts were hardly ‘running their own show’, as will be discussed below.

Before the dispute began several workers on contracts were given permanent positions. However by early 1998 SSC was divided between permanent fulltime workers who had paid leave but were not paid for more than 35 hours a week, even though they frequently exceeded 35 hours, and contracted workers who were paid for all hours worked, but were not paid for leave.

New Technology

The most important technological change at SSC was the shift from the Unix operating system to Microsoft Windows NT in 1995, ‘just because of Microsoft’s grip on things’.

We had to start writing stuff for the Windows NT operating system. So that was quite a change.....People didn’t get any proper training. They [management] just said we’ve got these training CDs and you guys are all smart dudes anyway so just kind of work it out on the job. And that was another issue as well. Even though we had to implement all these changes we found out management wasn’t going to fork out money to have everyone go on a training course.

There was nothing inherently more difficult in using the Windows NT system. However lack of training made the transition much more difficult, especially in the context of excessive hours and tight deadlines. The technical writer was also forced to switch from Frameworker to Microsoft Word, even though she considered it to be an inferior product that made her job more difficult.

Negotiating Change

The former SSC workers who were interviewed all argued that working conditions at SSC consistently declined between 1995 and 1998. By 1998 there was considerable tension at SSC, as it became clear that management were not replacing staff who had left, that hours were excessive, and that there had been a gradual erosion of staff benefits. There was a consensus among the workers that they were not being properly treated or rewarded for their efforts.

The immediate catalyst for staff action came from one software engineer. This worker had a politically active past, and was known to be pro-union by his colleagues. He had worked in SSC since 1995. March 1998 was the turning point in which he decided to take action. In March

they [management] retrenched this guy who was having real problems.....At the time there were troubles with the Japanese economy and they were looking for ways to cut costs. They just ‘cut’ this guy. He was on leave and they called him up and said ‘Don’t bother coming back to work’. That was the thing that made people think ‘you guys are bastards’. That was the final straw. Things had been simmering for a while, and people were really pissed off at that. I started shopping around for a union.

The retrenchment had an effect on many other workers.

The way it was delivered to us, it was not in a meaningful sort of way, getting everyone together saying someone got retrenched. It was like they sent an email out, and we were very shocked...We were shel- shocked, I think.....We thought what was wrong, I mean what’s happening, you know? Their excuse was because of the Japanese recession.

There is little indication staff would have searched for a union unless this one software engineer acted. It was (and is) just as easy to uproot and find employment elsewhere. It also came down to culture and confidence. One worker explained:

Most of the people would’ve worked in the industry as a whole and they would’ve had zero exposure to unions. Also, most of the staff were from overseas so they weren’t familiar with what’s acceptable in Australian society. There was one Japanese girl there and I questioned whether she would speak up about the problems… let alone join a union. I imagine it was unacceptable to her. Lots of staff from overseas, Poland, Russia and so on. They would’ve had little knowledge of state laws that we have to protect conditions.

Foreign-born workers were not the only ones used to keeping quiet. One ‘local’ worker said:

From my point of view I was actually doing good work, I was actually learning, so without some initiation to get us to join the union, I would still be there and would’ve happily carried on. But I realised that when we had our salary increase, we never had any say in what we got, and it was basically here’s the figure, take it or leave it.

The lead delegate began looking for a union. This is how he describes coming into contact with the ASU:

No one was in a union. There might have been one guy who was a member of APESMA, but he wasn’t really a ‘union member’. He treated it like an association, like a computer club you join. And that’s what they do really. I started looking around. I wrote to the CEPU and ASU, even the CFMEU because they covered ‘power people’ and all the stuff we did was for the power industry. I got replies from the CEPU and the ASU saying we should get together and see what we can do. But the CEPU was really slow off the mark. I met with an organiser from the ASU and we decided we could do something to start with and that was the contracts.

Even though Global Systems were trying to classify people as contractors, the nature of the contract was that Global Systems directed workers and had control over their work and, therefore, they were the real contractor. It was up to them the hours they keep and the way they want to do things. Also the fact that Global Systems was paying the insurance and the superannuation. Under NSW legislation they were classified as fulltime workers and were entitled to four weeks annual leave. That was very simple under common law and NSW legislation. It was something that we could at least go on. So I went back to the workplace and started saying to people we can actually do something about this. The union organiser can come and speak to us if you want. I said, ‘Anyone who’s interested please come along’. It was in the context of the MUA dispute. It was on the TV every night. Everyone was talking about it. It was that kind of environment. Everyone was talking about unions.

It was clear from the contracts that Global Systems was the true ‘contractor’. One such contract says:

During the contractor’s employment with the company, the contractor shall devote the contractor’s full time and attention to, and use the contractor’s best efforts in furtherance of the interest of the company and shall not engage in any other employment or occupation without the company’s written consent.

The contract goes on to stipulate the minimum number of hours to be worked per week (35), normal working hours in a day (8.30 to 16.30), as well as details of how the company will provide superannuation and workers’ compensation. All such clauses are part of the employment relationship under common law and NSW legislation. In other words, Global Systems’ own contracts show that the signatory to the contract is not a contractor at all, but a full time employee.

The meeting with the union organiser went ahead. The lead delegate explained:

We got about half a dozen people to come and meet the organiser from the ASU and people said they would go with it. After this, a whole lot of things cracked open. People started saying why are we doing all this overtime? It snowballed from there. It was a good core of half a dozen people who joined straight away, which I found really surprising. Before that I assumed that it was IT…But it wasn’t like that…

We decided that we needed at least half the people who were involved before we got the union to come in and say to management, ‘Let’s talk’. We managed to do that. It took a few weeks. It was all done by email. You had to be quite secret.

One of the software team leaders put himself forward as the second delegate. He approached the issue slightly differently, believing at first that it was possible to collectively negotiate with management without union representation.

My predominant reason [for becoming involved] was...I didn’t like the idea of people working extra hours even if they were getting paid for it because speaking personally you do too many 12 hour days in a row and you’re rooted. You’re not putting in your best, and it sets a bad trend because you can very easily get into the habit of working 12 hour days. So what I was trying to emphasise was having some sort of financial reward, merely as a disincentive for management to schedule things as such that overtime would be required. That was where I wanted the overtime. I wanted it to hit the employer, not reward the employee necessarily. I felt that the disadvantage of overtime was that you would get people working ridiculous hours and that was detrimental to their health.

After recruiting about half the workplace to the union, the workers confronted management. The first demand was to fix the contracts. Management conceded the contracts were illegal, and agreed to backpay annual leave for the employees on contracts, many of whom had been on them for two or three years. The lead delegate explained:

The contract stuff was sorted out. They said you got it according to the law. They had to backpay all these people, and they were pretty pissed off about that. That showed a lot of people that if you join a union, they know the legal stuff, they can help you out. Some people did quite well out of that with their payments. So that gave people a bit more confidence. We got a few more people joining the union. People said we can fix up a whole lot of workplace conditions. Things like, not only the overtime, but also appraisals and salaries.

Abolishing the contracts was only the start of the negotiations. The workers decided to negotiate a system whereby all permanent staff were paid for their overtime, given that permanent fulltime workers were not paid for working more than 35 hours. Staff also wanted to standardise performance appraisal and salary determination. Performance appraisal was highly informal, with a perception among staff that it was as much based on personalities as on performance.

The workers were negotiating for an agreement which covered all staff for overtime, performance appraisal and salary determination - effectively an enterprise agreement. As several of the workers pointed out, most of them had never heard of an enterprise bargaining agreement. Management, advised by the AIG, soon realised what the workers were demanding.

There was a bit of to-ing and fro-ing between the ASU and the AIG over legal stuff. They tried to create a bit of a furphy. They said, ‘There is a union that covers you guys, which is APESMA’. They said we were in the wrong union. The ASU had no right to cover us, and we should be in APESMA. There was no way they were going to negotiate a collective agreement with the ASU, because it’s the wrong union. At the same time there was a really basic award being negotiated. APESMA had served a log of claims on other IT companies not really covering software engineers. It covered scientists and engineers who did IT work. The AIG was involved in these negotiations and didn’t want to get a collective agreement in place before the award. There was no collective agreement at the time covering software people in Australia so they were worried, I guess, about any precedent that would set.

The AIG representative argued that management raised the issue of coverage because, once the IT award was established, APESMA would have ‘automatic rights of coverage’. However, this was not true for all workers in SSC. There were some workers in SSC who did not have IT qualifications and were not eligible to join APESMA. In fact, one of the software engineers had, at one stage, applied to join APESMA and had been told he was not eligible.

Global Systems’ fear of becoming the first company in the IT industry to negotiate an enterprise agreement was a recurring theme over the course of the negotiations, which were to last nine months. The union organiser argued that the negotiations took this long largely because management’s key consideration was to block the enterprise agreement and not to get ‘one out’ with the industry. She argued that their main tactic was to delay the negotiations as much as possible. The delay in negotiations had the opposite effect to that management might have hoped.

Global Systems would stall hoping that it would just die off. They didn’t really understand the level of ‘pissed-offedness’ among people. They would always say we have to contact Japan. There were all these delays. It took ages. Rather than put us off, it got people more pissed off.

The workers in the union would have regular meetings to formulate demands and make collective decisions. According to the organiser:

In the beginning [I told the workers]...guys, if you join the union it’s got to be your union in this workplace, and you’ve got to make your own decisions about how you want to go about things. I’m not the union, you guys are. I said that, and then demonstrated it as well...Obviously it’s the job of the delegates to be the leaders of the union in the workplace, but we always made sure that our decisions were made collectively and it wasn’t me voting or making decisions, it was the workers. So it got to the point where that allows workers’ own creativity and their own ideas, things like setting up their own website, and we had email. [The lead delegate] would send stuff to everyone there. It was a way of them taking ownership of the issue and saying okay, it’s no use relying on this one organiser because, really, if we want to achieve anything it’s up to us.

Apart from organising their own internal website, the workers also sent a petition to the chief executive officer in Japan.

Initially the attitude of most of the workers was to be wary of confronting management, even if they joined the union straight away.

I know for me, I was very reluctant to join. I mean I know from being a student before, being part of the student union at uni, I thought the union was very helpful then. But I never used its resources. I never thought it would apply to our industry and the work we’re in. What can we ask for, I kept on saying, what can we ask for? And during that I can remember saying oh you know those Japanese, they’re not going to talk to us. They work hard, and compared to them we’re just doing 36, 38, 40 hours a week. And they do like 70 odd hours, basically stay there. So the union gave me an idea of what we want, such as overtime. You know, we can always negotiate, basically lay down all our rules on the table and hopefully they can respond to that. And in my mind they weren’t going to discuss this. That’s how it turned out to be really....I mean, I know I joined because it was part of the majority. Everyone actually joined, so I went along with it basically.

Other workers took the view that they could only achieve something if they worked collectively.

I felt I was a bit wary...Probably only [the lead delegate] was the only person who was all gung ho, because he’s a union person through and through. Whereas basically we’re all conservative and not so left wing.....But I thought I’m not getting anywhere on my own as an employee. They just dismissed everything that we had asked for, and I know that other people felt the same way. So I thought if we all joined the union and worked together as a group they could see we were all after the same thing and, you know, it wasn’t just one person being ungrateful or whatever. If we all worked together they would actually realise that we were being serious. The conditions weren’t normal, and we wanted something to be done about it. We wanted a united front.

Another worker said:

When I was presented with the union as a way we can discuss and get organised and so on, it seemed like, okay, if we want to get by, as a member of a group who wants to see an improvement in this workplace, if you want to enlist the services of the union then I feel I need to be a member, to participate in paying the union for their services. I didn’t think it was fair to expect any benefits that the group gets, especially as it was such a small group, so I put my hand up when it came time for those offering to be a member and to pay the union. And there was at least a couple of staff members who did adopt that role and it was certainly their choice, but at least one of those staff members did also at the same time expect whatever benefits we were getting, whereas the other one decided he wasn’t going to have any involvement at all. He would never come to the meetings. So that was fair enough, he sort of stayed out of it.

Some workers worried that management might react badly to the involvement of the union.

I think if there had been another way we would have taken it rather than go through the union because going through the union scared the management no end. They were just totally terrified of going through the unions, of what they thought the union, through us, was going to do. They got their knickers in a twist like you wouldn’t believe. [Senior management] and all that lot, they were just so scared.

During the negotiations, many worker began to learn new skills, such as how to negotiate and how to formulate demands. There was also something of a cultural shift, as workers became used to making decisions collectively. The lead delegate explained:

There was a lot of stuff about getting other people to join, getting people switched on to what it means to negotiate collectively.....Those sorts of meetings were quite fascinating. We would call a union meeting and we’d talk about stuff and people would start with ‘well it’s pointless asking for that, because management will just say no, they won’t like that’. And we would go, ‘Yeah we know that. That’s why we have to push it’. People would say, ‘Yep, let’s go for the 35 hour week and then say anyone who works more than 37 or 38 hours would get paid overtime’. You’d say, ‘What’s with the 2 or 3 hour thing? Why do you want to work for free in that 2 or 3 hours?’ They would go, ‘It’s like give and take’ and someone else would go, ‘What are you talking about? We need to get paid for the whole lot’ and everyone would go, ‘Yeah, yeah, you’re right, like what am I thinking?’ People were, I guess, trying to get the manager out of their head and realising that there are separate interests. Management are actually trying to do us over, and people getting used to that....


In fact, in one of the meetings someone actually said to someone else, ‘Yeah, we’ve got to get over this brain washing’. Something clicked and people said, ‘Yeah right, we can actually ask for more things’.

As this suggests, workers would often approach negotiations by starting with what management would find unacceptable, rather than what they felt they were legally or morally entitled to. One internal memo between staff shows this mindset. An overtime system was proposed with time-and-a-half paid for the first two hours over the agreed minimum daily number of hours, with double time for any hours beyond that. One worker responded with what he believed management’s reaction would be:

Management reaction: "People will rip off the system"

Our reaction: "We are very honest, really"

Management reaction: "Yes, especially after we bring back punch in time cards"

I think they will only pay/give time in lieu for: * Project delivery periods (define when one starts/ends. Are we in one now? No not really)

* Working more than 45 hours in one week.

The professionalism of some workers also affected how they wanted to negotiate with management. For example, the concern to change the system of performance appraisal raised some different perspectives. The organiser advised the workers that they needed to find forms of appraisal that could be ‘objectified’ or accurately measured for comparison. However, software development is hardly a ‘production line’ task. Staff found it was quite difficult to quantify work into ‘objective’ units to be measured, especially as a lot of the work involved individual research or work that emphasised the ‘subjective’, creative elements involved in writing a sub-system or de-bugging a code. One worker suggested a system of peer assessment, in which subjective anomalies in the appraisal process could be minimised by having as many qualified staff as possible assess their peers. The organiser was more concerned to minimise the proportion of salaries determined through individual performance reviews, preferring to concentrate on reward for collective effort through the number of hours worked.

This process of organising and fine-tuning demands continued for several months. The union organiser explained:

[The workers] were quite scared...We had about three of them that were on side, but a lot of the others needed convincing. And that was through a process as well. Global Systems at one point made an offer to us and they were in the meeting. It’s always a process of trying to get other people to say their opinions rather than those three outspoken people. And there was this foreign guy and he goes ‘Well there’s this offer. I don’t know why we’re debating it. It’s shit. Let’s throw it in the bin’. So that sort of changed the dynamics of things a bit when people who had before been sitting on the sidelines, watching and waiting, got involved. It made a big difference.

The process of slowly coming to grips with collective organisation and negotiation was one reason industrial action was not taken straight away. The organiser continued:

We sort of raised the idea of industrial action probably about four months into it but there was no way anyone was up to it. But the main thing we did was to try and create an environment in all of our meetings where people were really free to air their real feelings. Especially because a lot of these workers were really quite quiet. And they would think things, but not say it. So it took a long time to build that trust so that people were open about talking. When we first aired it, one of them honestly said, and this guy ended up being a delegate, ‘Look you know, the idea of a strike, you’ve got to understand, for us is psychologically a major barrier. Going on strike is not something IT workers do. It’s not something we ever thought we’d do in our lifetime and it’s something we’re not prepared to do at the moment’. So really what we had to do was exhaust every single strategy we could do fairly and be the most reasonable people and show that the bosses were being unreasonable. And really in the end, the workers said, ‘Well look, we’ve got no other option. We’ve exhausted every other option’, and it really was a case of being convinced by the process.

Taking Action

Even though the workers did not initially want to go on strike, other forms of industrial action were taken. The workers banned all overtime over 37 hours a week in October 1998 ‘just to say to management that we’re still negotiating’.

That freaked out management. It showed that we were serious, so they had to take us a bit more seriously then. It also gave people a bit of confidence out of that. People started getting used to only working 37 hours max. It was really good. Everyone was going home at the same time and that gave people a bit of confidence. They also realised it was an easy thing to do. If everyone does it, there’s nothing they can do. That little step that was a psychological hurdle got people used to the fact that you take these sorts of action which are fine.

In December, after several meetings with staff, Global Systems made their first offer: new individual contracts. The offer included payment for overtime above 38 hours at normal (single) working rates of pay.

They basically wiped away the idea of a collective agreement. They said no.....and it was like, nothing. Everyone just went, well, what the hell have we been talking about for months? They obviously haven’t bothered to listen to us. So that just got people pissed off...You know, people had all these high hopes. Management were making all these nice noises. They were meeting with us even though they were trying to stall. People though,t’Ggreat, this is kind of working out, we’re making progress’. And then they just said, ‘Here’s this pissweak offer’ and illusions that people still had were just shattered. People said, ‘Okay, you guys are just bastards. You’ve just insulted us making this bullshit offer’. So that’s when we [decided to take action].....

It was almost right before Global Systems closes down for a week over Christmas. So we served them with notice. We rang up the union, because we were in the bargaining period, and said, ‘Righto, give them notice. We want a meeting when we get back. We want a collective agreement. And if you don’t meet with us we’re going to take industrial action’. And we’d worked out we could put on all sorts of work bans. We would not release software to Japan. We canvassed everything at stop-works, including strikes.

In response, Global Systems sent a memo to staff in January 1999 which said they were concerned

that discussions between staff and management have become too adversarial .....The discussions which were originally focussed on conditions, have changed to a discussion about an Enterprise Agreement. It is my understanding that most (possibly all) other IT companies do not have Enterprise Agreements. I would like to discuss the reason that staff feel the strong need for an Enterprise Agreement with Global Systems (compared with other IT employers, or will staff members only work for companies offering Enterprise Agreements from now on).

The threatened action did not go ahead as management agreed to withdraw their offer and re-negotiate the overtime issue. An agreement was made in which staff would work on the basis of a four week cycle. Staff could manage their own hours as long as the cycle averaged 35 hours a week on normal time. For the first 15 hours over 140 hours per cycle, time and a half was paid, and double time after that. Management also agreed to pay for travel time on trips to Japan. However, management were still not willing to certify an enterprise agreement. The negotiations stalled once again.

The stalling of negotiations now began to work against the staff because the general ‘churn’ in the industry meant many workers were leaving and not being replaced. By January 1999 SSC had lost seven workers, and this had a corresponding impact on the strength of the union in the workplace.

Management’s Approach to the Negotiations

Because of their unwillingness to be interviewed, there are obvious limitations to understanding exactly what motivated management before and during the negotiations. However, it is possible to make three broad points about management’s role in SSC. First, management strategy forced a change in the culture of the workplace over the course of the 1990s. Although workers often viewed managers as peers with supervisory roles, during the negotiations the relations between management and staff were markedly different in the period after 1995. Management did not reward staff in the old way, and staff began to lose trust in the company.

During the negotiations it became clear that the respective positions of both parties were counterposed. Global Systems were looking to cut costs under pressure from the Japanese recession and the fact SSC was a loss-making sector, and staff were insisting more money be spent on benefits, basic training and payment for hours worked. This contradiction meant management would often try to divert negotiations away from the immediate demands of staff. For example, they consistently argued that the ASU had no right to cover SSC workers, and that APESMA was the appropriate union. Staff minutes from negotiations in October 1998 show that management attempted to argue salaries were already calculated to cover some overtime. Although salaries were partly determined by the number of hours worked, management were unable to show how overtime was objectively measured and compensated. One of the delegates said:

I don’t know whether it was through genuine misunderstanding or wilful misunderstanding, [that management said] the argument was about money. Management repeatedly made the argument that we were out for more money and that was untrue… six months into it they were making those comments.

The fact that staff perceived management were distorting their arguments, or were diverting attention from the real issues, led to much ill-feeling in SSC - quite a different environment to the SSC of the early 1990s. From their reaction to the threat of industrial action in January 1999, it is likely that management under-estimated the level of ill-feeling among staff and their collective desire for change. They also under-estimated the degree to which staff were prepared to fight, which is perhaps not so surprising given this was an industry first.

Secondly, the role of the AIG, at least from the workers’ point of view, lent a particular ideological quality to the negotiations. A software team leader argued:

What union involvement did do unfortunately was bring in the AIG from the other end of the spectrum. I won’t deny that politically I’m mainly left wing, I do believe in union representation...But this guy was ideologically like Genghis Khan, you know. He was like a dinosaur. He was borderline unreasonable is probably the best way of putting it. And I didn’t feel he was representative of management opinions or views, or interests for that matter. At the end of the day what management want is a productive workforce. What unions want is happy staff, or staff working in a happy, nurturing environment and the two ain’t mutually exclusive at the end of the day. Whereas this guy, he was almost to the point where he wouldn’t talk to the union representative...I can remember her being at one meeting, and he was almost rude, you know, and it took [the development manager] to say well hold on, it seems we’re getting away from the point, a little bit here.

A staff memorandum from September 1998 complains of the AIG representative being ‘ideological’. Clearly, both he, and senior management, felt there were serious issues at stake in allowing union representation to take hold in an IT workplace, and in preventing an enterprise agreement from being negotiated. The AIG representative argued:

The ASU saw the alleged dispute at SSC as a means to become active in the IT industry....The ASU made it clear that they were very interested in securing an enterprise agreement with the company as well as solving the matters in issue. No doubt, the ASU were keen to gain a ‘foothold’ in the IT industry and generate some publicity arising from the alleged dispute.

The concern not to be ‘one out’ with the industry was the third, and most important, issue for management. The union organiser pointed out that most major IT employers were opposed to the settlement of the APESMA IT award being negotiated in 1998 and 1999. It should come as little surprise, then, that Global Systems consistently raised the issue of union representation and, more particularly, their opposition to an enterprise agreement. Apart from maintaining ‘industry solidarity’, management were also concerned to make sure that other ‘probably more profitable’ sections of the company did not follow any precedent set by SSC. Throughout the negotiations, they were concerned to prevent the dispute from becoming public knowledge. As it happens, staff were successfully able to publicise the dispute through several media channels, and the other sections of Global Systems very quickly became aware of the dispute within this ‘separate elite group’. One of the technical writers said of the other workers at Global Systems:

The ones that we used to talk to said, ‘Good on you’. But then there were ones that we didn’t talk to and they just ignored us. Mainly the senior management, but the workers were all behind us. We didn’t get any backlashes or anything. Most of the people we spoke to were very supportive.

The workers were keen to publicise the dispute because of the precedent it set. The fact that a certified enterprise agreement would be an industry first was at the forefront of their minds. One of delegates explained that, despite the falling numbers in the workplace and the growing signs that Global Systems was winding down its SSC operations, they pushed ahead through ‘sheer bloody-mindedness’, even though it was just as easy to find work elsewhere.

I wanted an EBA. I wanted a public agreement. One of the motivations was because we realised that this was the first of its type.....We wanted that to be public so it could affect the industry as a whole. At least affect the industry like that, so we could say we’re Global Systems employees, these are the conditions under which we work.

The Geeks Strike Back

The final straw for the workers came early in April 1999. Another meeting was planned between management and the delegates. The lead delegate explained:

[Management] kind of pulled a fast one on us. It was just supposed to be management and the delegates. So we said, ‘Okay if you’re too worried about it getting too adversarial, we don’t need the union person there’...We were kind of up to speed, we were all psyched up, and we knew the arguments. And then on the day of the meeting, they said the AIG person is going to be there. So we went hey, that’s not part of the deal. So what we said was ‘All right, if that’s the case, all union members are going to be in the meeting’. So there were 14 of us on one side, and the four of them on the other. So this is where we heard all the bullshit, that if they gave us a collective agreement they were worried the other workers in Global Systems were going to want stuff. So everyone got to hear it, everyone was present and that just pissed people off. It was like fuck you, screw you guys. That’s when we decided that this is a joke, we’re serving notice. So that afternoon, they got in a fax from the union saying yep, you know, because we had to give 72 hours notice [under the Workplace Relations Act 1996].

The workers agreed to put bans on overtime and the release of software to Japan on April 6. In a final attempt to placate the workers, Global Systems offered a ‘collective Australian Workplace Agreement’, a series of AWAs with identical start and finish dates. Staff immediately rejected the offer.

We turned up on the day of the action. We had our union meeting first thing. We made sure everyone was going to do this. Everyone said yep, cool. There was a release of software due to Japan that day, which was quite lucky. And we said, yep, that’s not going to happen. We’ll do work, but we’re not going to release software to Japan.

At this point management emailed orders to staff that, under the Workplace Relations Act, they were required to obey all specific instructions by the company if they wanted to be paid.

Everyone went, ‘Okay, fine. This is now a strike. Yep, catch you later’. So we had another meeting straight away and said, ‘Right, well I guess we’re on strike’. We went back to management and said, ‘Fair enough, if you don’t pay us we’re on strike. So we’re serious, bad luck’.

What happened was Global Systems decided they couldn’t risk giving us a collective agreement. I think they were quite willing to let the place just explode if it meant not giving us a collective agreement. Because they were freaked out at the ramifications for the rest of the company.

So they drew a line in the sand. They said, ‘What’s your problem? You have won all your conditions. You’ve won a heap’, which was true. We’d won heaps out of it. We said ‘We’ve been telling you all along’...

So what it came down to was, well, go on, take all the industrial action you want in the world. We’re just going to say no. Then it was obvious that it was going to get really difficult. People started to worry.

Staff decided their only option was arbitration. ‘It’s not really what we wanted but we had little else to do’. But again, under the Workplace Relations Act, the Commission only has powers to recommend a settlement to the dispute. Global Systems informed staff that they would stick to their decision regardless of the Commission’s decision. ‘We were hoping we could at least shame them into, you know, something.’ At this stage the dispute hung between management’s offer of a ‘collective AWA’ and the workers’ desire to certify a formal enterprise agreement. In the end, a compromise was achieved.

What we managed to push them into doing was having a sort of Clayton’s EBA. It is a collective common law contract which everyone is covered by and we got put in provisions that any new staff that are hired have to be under the same conditions. Nothing can be changed without all staff agreeing to it. So we didn’t end up with a registered enterprise agreement but we ended up with a collective agreement of sorts. It was really quite interesting that in nine months people went from zero consciousness to going on strike. It was the first strike of geeks in Australia definitely.

In the aftermath of the dispute ‘there was a bit of carnage on both sides’. Several people resigned, after seeing the dispute through to the end, even if some workers were unhappy with not achieving the final step of certifying the agreement. However, as one worker said:

We didn’t realise things were going to close down. We thought things were going to continue. And so we were doing it for the benefit of new people so they would get at least what we got. If they wanted to negotiate better conditions then that was up to them, but they would always get the minimum and they would always get paid overtime...So it was protection for them.

The development manager also resigned after the settlement. When everyone finally went back to work, there were just nine or ten staff left. Over the course of the next twelve months, staff gradually left in greater numbers as new jobs beckoned and as Global Systems increasingly developed software in Japan. In March 2000, with just two people left, Global Systems closed SSC.


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Case study sources

Global Systems software engineer contract
Internal memorandum between SSC staff, undated
Internal memorandum between SSC staff, September 1998
Internal memorandum from Global Systems management to SSC staff, January 1999
Interview with AIG representative, October 2000
Interview with ASU organiser, March 2000
Interview with SSC software engineer A, June 2000
Interview with SSC software engineer B, August 2000
Interview with SSC software engineer C, March 2000
Interview with SSC software team leader, April 2000
Interview with SSC systems/network administrator, March 2000
Interview with SSC technical writer, March 2000

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