NBN Co refuses to say if execs held to account for subcontractor pay scandal

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NBN Co refuses to say if execs held to account for subcontractor pay scandal

Or if bonuses were impacted in any way.

NBN Co has refused to say whether anyone in the company was held accountable or had their bonuses reduced after a subcontractor pay cut scandal last year.

The network operator also angrily rejected an assertion by Labor Senator Tony Sheldon that cutting the take-home pay of its contract field force by restructuring agreements with its key delivery partners amounted to “unethical conduct” on NBN Co’s part.

The cuts came courtesy of a troubled program codenamed ‘Unify’ that changed the way NBN Co outsourced field services to its major delivery partners.

The program led to pay cuts, protests, a backdown by NBN Co in the form of a $75 “top-up fee” per job, and a KPMG audit that NBN Co refuses to release.

With parliament resuming this week, and NBN Co’s half-year results scheduled for Thursday, the issue has been reignited by the company’s ongoing secrecy and refusal to answer questions surrounding the fallout.

NBN Co on Tuesday sidestepped a direct question on whether “anyone in NBN Co [had] been held accountable for cutting subcontractor pay, and then trying to pretend it was all an accident through a supplementary $75 payment.”

“There has been no pretence of an accident,” NBN Co fired back, saying it had “worked - and will continue to work - openly with industry to address identified issues.”

Its response did not address the issue of accountability at all.

In addition, the company was asked whether “any senior executive in the company had their bonus reduced because of this unethical conduct; If yes, who and by how much.” 

In response, NBN Co simply stated: “NBN Co rejects the allegation of ‘unethical conduct’.”

NBN Co’s “bonuses” - technically “at-risk” components of employee salaries - were a sore point for those doing the actual field work as their pay was simultaneously squeezed.

The $78 million awarded to 3800 staff at NBN Co led to calls for greater scrutiny, and tighter rules on payments by government entities a month later.

More broadly, NBN Co’s refusal to address questions about the internal repercussions of the scandal is likely to raise eyebrows.

Company executives were accused last year of turning a blind eye to the experience of contractors.

NBN Co has consistently argued that it relies on its delivery partners to treat contractors fairly and lawfully, but has no visibility into the arrangements.

It relies almost entirely on a statutory declaration that delivery partners must file with every invoice as its sole assurance that contractors are being looked after.

That appears misguided, but by how much may never be known. The document with the answers - KPMG’s audit - remains out of view, and is very unlikely to ever see the light of day.

NBN Co said at the end of last year that it has “not committed to making this report public.”

It went on to say that “to publicly release this report could breach a duty of confidentiality to third parties and prejudice NBN Co's commercial and legal position in its commercial contracts with [delivery partners] or other third parties.”

“It could also undermine the future willingness of stakeholders, including for example field technicians and service delivery partners, to provide full and frank information and therefore harm NBN Co’s commercial interests and review processes,” NBN Co said.

Asked by Senator Sheldon again why NBN Co is “hiding the audit”, NBN Co repeated its previous response, alleging damage could result from its release.

A senate inquiry ran concurrently with the KPMG investigation and exposed a range of poor working conditions, including infamous allegations of drugs being used as kickbacks in exchange for work.

That exercise prevented investigations into the pay cuts from being conducted entirely outside of parliamentary or public scrutiny.

The pay cut scandal occurred at the same time as new systems were introduced by NBN Co to distribute field jobs to contractors.

It emerged that too many staff were onboarded to these systems at once, and the amount of data being collected overwhelmed the system, causing latency and performance issues.

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