More than 600 call centre staff working on Services Australia lines outsourced to international managed services provider and prison operator Serco are set to lose their jobs after a $343 million contract with the welfare agency was not renewed.
The mass sackings, understood to be in the pipeline for the end of the financial year, have prompted a furious attack on federal Labor from the Australian Services Union, with the Victorian Left powerbroker publicly slamming the Albanese government over what it says is a major “procurement bungle”.
“It’s unacceptable that a Labor Federal Government has contributed to a situation where Australian workers have been given just two weeks’ notice that their lives are about to be upended and their jobs terminated,” said Australian Services Union Victorian Private Sector Branch secretary Imogen Sturni.
“Most of these workers do not have the safety net provided by generous termination benefits and even for those who will receive a minimal termination payment, two weeks’ notice is a pretty shoddy thing to do to them.”
The junking of the contract with apparently little or no provision for sacked staff to transfer into other roles is a headache for both minister for government services Bill Shorten and finance minister Katy Gallagher as the Albanese government prosecutes its stated agenda of reducing outsourcing in the public service.
It also demonstrates the difficulty of managing ‘at arm’s length’ procurement processes delegated directly to agencies to discharge themselves without ministerial influence, a governance point Shorten has repeatedly rammed home in his pursuit of his erstwhile predecessor Stuart Robert.
Also in the mix is a good old-fashioned union turf war for members, with a reduction of reliance on outsourcers by the government necessarily shifting employees back into direct government employment, and thus different union coverage, with the main beneficiary being the Community and Public Sector Union.
With call centre staff generally in short supply across both the public and private sectors, one of the issues for Services Australia is that those staff leaving Serco may simply go to another agency, jurisdiction or sector.
Never uncontroversial, the Serco contract with Services Australia was first inked in 2017 and was bitterly opposed by the Community and Public Sector Union, which blasted it as a way to cut wages for work public servants should be doing.
The contract came after multiple excoriating reports and audits roasted Centrelink for botching its call centre volumes and creating huge wait times and the plain inability to even get through to a person.
A 2015 Australian National Audit Office report into the Centrelink call centre fiasco found customer call abandonment rates of around 30% thanks to long wait times (with a benchmark KPI of 16 minutes) and that “13.7 million calls were unable to enter the network, that is, the calls were blocked and the callers heard the ‘busy’ signal.”
The call time blowouts were attributed to staff culling in the agency caused by the imposition of the efficiency dividend on agencies, with the Community and Public Sector Union calling out the haemorrhaging of staff as Centrelink’s ministers tried to frog march users onto semi-functional web interfaces.
“In five years, Human Services has cut almost 5,000 jobs in call centres and in-face service centres and yet in the same period staff are answering roughly three million extra calls a year. The demand goes up as more people call, with our population up by 6 per cent or 1.5 million. The maths just doesn’t add up,” then-CPSU national secretary Nadine Flood said in 2015.
The Serco deal was supposed to restore some of that capacity, but it also created a mechanism for the Abbott government to try and dilute levels of industrialisation inside Human Services by sending work to outsourcers.
Centrelink has, for decades, been the government’s main frontline for inbound customer contact, providing white-labelled services to other agencies like emergency and crisis hotlines for major incidents and disasters.
There has, at times, been discussion of creating a centralised pool of call centre staff to work across government to iron out the lumpiness of workloads, but in the main, both major parties have looked to external providers to fill gaps as and when they arise.
While the Abbott government and its successors made a point of pruning back permanent public service numbers, especially at big agencies like Services Australia, the reality is agencies have often found it hard to hire the staff they need on the money they can offer, making outsourcing or contracting-in help the fudge for unattractive wages.
Some of that dynamic may have changed post-COVID, with flexible work now more normalised across the economy allowing call centre staff to work from a variety of locations as opposed to a classic boiler room set-up.
But the real problem for Serco’s staff working on Services Australia lines is that Serco just didn’t win a contract renewal, meaning that 610 staff at its Essendon Fields and Mill Park sites, most of whom are full-time permanent employees, will be shown the door.
Peter Welling, CEO of Serco Asia Pacific, told The Mandarin he was proud of the work the Serco Services Australia team had done.
“Right now, our priority is to care for the 607 people who were told today they would not have a job beyond 30 June, Welling said.
“Our dedicated, talented people deserve to be treated with care and respect, and Serco will be doing everything possible to ensure this will happen.
“Our people were part of the core services delivery team through our Melbourne-based contact centres. Our teams also assisted millions of Australians during difficult times when they needed us most.”
However, the ASU has labelled the terminations as an “eleventh-hour decision” that will make workers unemployed in a fortnight without the support or time to find new work.
“Most of these workers do not have the safety net provided by generous termination benefits and even for those who will receive a minimal termination payment, two weeks’ notice is a pretty shoddy thing to do to them,” Sturni said, before putting the boot into the government again.
“It’s a bitter pill to swallow from a government that claims to have workers’ interests at heart with a focus on secure jobs, liveable wages, and fair conditions,” Sturni said, adding it was the responsibility of government to ensure its procurement processes “do not have unreasonable adverse effects on workers.”
“The ASU has been calling for a federal call centre code for contract call centre workers and this should be a priority to ensure that these workers have decent entitlements, fair classifications and secure work.”
The latest sackings from Serco are by no means the first, with a previous recalibration of its contract with Services Australia in 2020 shedding 400 jobs, with Bill Shorten attacking then-minister Stuart Robert over the terminations and demanding he explain why “Services Australia is throwing 400 Victorians to the back of the unemployment queues.”
It is believed firms TSA Group and Concentrix secured work under the latest contract rollover.
AusTender procurement records show that in September 2022 Concentrix Services booked in an additional $11.6 million worth of work up to 30 June 2023 to its existing contract with Services Australia, first inked in 2018, which has now delivered the firm a total of $258.1 million in work for “temporary personnel services” since it was let.
A statement from Services Australia said it had “conducted a competitive procurement process for a new supplementary call centre contract to provide services from 1 July 2023, in accordance with the Commonwealth Procurement Rules and engaged an external probity adviser to oversee the process. Serco was not selected through this procurement process.”
A spokesperson for Services Australia said the agency “has been actively recruiting for APS staff and has ensured contracted staff were encouraged to apply for job opportunities as they became available” but added that “Serco is responsible for the arrangements of its staff.”
“We thank Serco for their support. They’ve provided services to supplement day-to-day operations and to help fill short-term requirements – particularly during business peaks and in the coronavirus pandemic.”
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