Waging war in call centres

Call centre outsourcers must now have the same wage conditions as their clients, but at what cost?

Call centre outsourcers provide an experienced front line for customers at a price that varies according to the size of the contract and the scope of the task.

But call centre outsourcers will need to remodel their employee wage and condition structure to match those of their clients, following a Federal Court decision handed down in September.

The case itself involved a customer service contract Telstra held with outsourcer Stellar Call Centres. Stellar had provided an extension of the work that some of Telstra's in house staff already perform, by taking 'overflows' of calls, particularly in agreed regional areas.

"There shouldn't be the same reticence over outsourcers, or suspicion of how they provide their services."

While such terms are not idiosyncratic to this contract, it drew the particular attention of the Community and Public Sector Union (CPSU), as Stellar is a subsidiary of Telstra. Contracted call centre staff were earning between $5000 and $10,000 pa less than their colleagues at Telstra for providing the same service, according to the CPSU.

The union has been the primary pursuant of this case, arguing that the NSW Workplace Relations Act requires staff who are performing the same task for a company, whether in that company or a contracted employee, should be subject to the same wage rights and conditions.

"With the decentralisation of the wage agreement structure, there is not the same protection for the employee or onus on the employer," said Stephen Jones, secretary of the CPSU's telecommunications division.

The decision only immediately affects companies that outsource to meet excessive demand on call centre roles that internal staff also perform, but the ramifications are set to influence the flexibility of all call centre contracting.

"Outsourcers are based on efficiency, and may handle calls on behalf of a number of clients," said executive director of the Australian Telemarketing and Call Centre Association (ATA), John McCoy-Lancaster. "Contractors will be forced to look much more at the worth of their clients, and monitor and control the time they spend on each account."

While Mr McCoy-Lancaster foresaw more complex contract arrangements by clients' human resources departments in the wake of the decision, he said that it should create more equality between the parties, and help clients establish partnerships with their outsourcing contractor.

"There shouldn't be the same reticence over outsourcers, or suspicion of how they provide their services," added Mr Jones. "Their contract agreements will reflect more of the contracting organisation's policies, which the client trusts."

Outsourcers may also find greater wage and condition security in the contracts they negotiate, Mr Jones said.

"Contractors will be forced to look much more at the worth of their clients."

For the equality it introduces, this decision will have an undeniable impact on both contractors' and clients' bottom line. "Contractors will have to look at their margins, which aren't big at the moment because there is not a lot of call centre outsourcing done in Australia," said Mr McCoy-Lancaster.

Mr Jones conceded that clients will also have to evaluate the value of paying contractors' fees and equivalent wage rates. "Companies may end up having a second look at the benefits of outsourcing, as there is not the same profit differential with regard to labour costs," he said.

While the CPSU is willing to pursue other litigation in future, it is writing to call centres and their current and potential clients to establish agreements over employee conditions.

The ATA is also developing a cooperative of interested outsourcers and clients through the creation that will negotiate industry standards "to make it easier to move forward", said Mr McCoy-Lancaster. This group will hold its first meeting in the next four to six weeks, and Mr McCoy-Lancaster hoped to be able to implement some of the standards it agrees on early next year.