Final Change Plan
On 17 February 2012, the University released a Final Change Plan and invited staff and unions to comment on a draft implementation plan. The period for formal feedback closed on 29 February. As of 16 March, eight individual responses had been received: one from a person external to the University, two from students and five from staff members. Of the eight, seven opposed the changes but none provided comments specific to the implementation plan.
On 21 November 2011, the University published a Draft Change Proposal setting out a proposed strategy for reducing expenditure on a University-wide basis. The Draft Change Proposal noted that non-salary expenditure would be reduced by a total of $28 million across the University, and put forward two proposals for reducing salary-related expenditure. These were to reduce both staffing-related administration costs and academic staffing costs by 7.5 percent across the University as follows:
- Faculties, portfolios and professional services units (PSUs) would be given an expenditure cap restricting the total amount they can spend on general staff salaries, casual salaries and contractors. Where savings are required, each faculty, portfolio or PSU would then be responsible for formulating and implementing a strategy to achieve them, and where the implementation of strategies at the individual faculty/portfolio/PSU level would involve changes to which the Managing Change provisions of the Enterprise Agreement apply, the relevant area would be required to develop and progress its own change management proposals.
- Overall academic staffing costs across the University would be reduced by approximately 7.5 percent. Under the Draft Change Proposal, it was envisaged this would be achieved primarily through offering eligible staff voluntary redundancy. The process for determining which staff would be offered voluntary redundancy was set out in Appendix 1 to the Draft Change Proposal.
After considering the feedback received from staff and unions, the University decided to proceed with the broad expenditure reduction measures outlined in the Draft Change Proposal, and on 3 February 2011 issued a Formal Change Proposal. The Formal Change Proposal included changes to the process for reducing academic staffing costs, with more emphasis being placed on measures such as flexible options including pre-retirement contracts, and natural attrition in addition to redundancy to achieve the budget savings required, as well as changes to address some of the concerns about the assessment process.
Staff and unions were invited to comment on the University’s Formal Change Proposal, and responses were received from 14 staff and from the CPSU and NTEU. A meeting of the Management & Staff Consultative Committee was held on 13 February 2012 and meetings with the unions were also held on 8 February (NTEU), 16 February (CPSU/NTEU) and 17 February (CPSU).
While the responses to the Formal Change Proposal opposed its implementation, the University has concluded that there are no viable alternatives to achieving the required savings, and it has therefore been decided that the proposed changes will be implemented as outlined in Part 3 below.
Staff and unions responding to the Formal Change Proposal opposed the proposed budget reductions generally and also raised concerns about the assessment process for academic staff.
Key issues that were raised were as follows:
- Whether there was any need to make the savings that the University is seeking
- Whether there are alternative ways to achieve savings to avoid reductions in staffing numbers
- Whether the proposed redundancies are genuine redundancies
- Concerns about using research-related criteria as the basis for the academic assessment process
- A need to assess research output over a longer period
- Concerns about increased workloads for academic staff
- Concerns about adverse impact on students
- Concerns about increased workloads for general staff
- Whether the changes will result in increased casual staff
These issues are discussed below.
(a) Whether there was any need to make the savings that the University is seeking
The savings to be implemented through reductions in staffing-related expenditure are necessitated by shortfalls in student fee income and urgent capital expenditure needs.
The revenue forecasts that underpinned the strategic objectives that were decided for 2011–2015 included a forecast that total student fee income for 2011 would be $828.1 million. The actual income is $792.3 million, i.e. $35.8 million less than the forecast which underpinned the 2011–2015 Strategic Plan.
The key reasons for this result were a considerable softening of international student demand (driven by factors such as the high Australian dollar and immigration restrictions which came into effect from 2010–2011) and changes in enrolment patterns for CSPs, with many students enrolling in fewer units of study than a standard full-time load.
These enrolment trends are expected to continue, and will have significant pipeline effects for the next few years. The softening in international student demand also means that annual fee increases must be kept to a minimum in order to remain competitive. The combined effect of these factors is that the results for 2012 and the following years will also be well below the original targets that underpinned the 2011–2015 Strategic Plan.
Given the reasons for the decline in growth of student fee income and the pipeline effect of changes in enrolments, the University has also been required to revise down its revenue forecasts for 2013–2015.
As our planned income reduces, there nevertheless remain pressing needs for capital expenditure as outlined in the Formal Change Proposal. This includes expenditure needed to meet our work health and safety requirements and obligations under disability discrimination laws. While final decisions have not been made in all cases as to which projects will proceed in 2012, examples of projects which have been identified as high priority include the following:
- Installation of additional smoke detectors and replacing fire doors and upgrading FH booster in Fisher Library
- Campus-wide upgrade for Emergency Warning and Intercommunication System
- Replace air conditioning system in Blackburn Building
- Asbestos removal in Anderson Stuart Building
- Painting/waterproofing – Mallett Street
- Laboratory and lighting upgrades – Oral Health, Westmead
- Install sterilization facilities, upgrade ventilation and install safety eye wash facilities at Cumberland
- Laboratory and classroom upgrades – Chemistry Building
- Refurbishment of SMB Service Centre/workshop – Molecular Bioscience Building
- Reconfiguration of rocksaw room – Madsen Building
- Upgrade to safety facilities and liquid nitrogen storage – RMC Gunn Building
- Mortuary and laboratory back up power upgrades – Sydney Medical School
- Lift repairs – Shepherd Street car park and Education Building
- Ramp for lower level teaching facilities in Carslaw Building
- Installation of lift and ramp for access to Western Tower Room
Some staff have queried the need for savings given the net operating margin of $113.7 million in 2010. This amount included $79 million in funds that may be used only for the designated purposes for which they were given, and cannot be diverted to other purposes. This $79 million comprised:
- Capital Grants of $24 million. These are grant funds, provided predominantly by the Federal Government, for designated building projects, and cannot be used for other purposes. They are included in the net operating margin because the relevant accounting rules require them to be reported in this way.
- Donation and bequest income of $37 million. Approximately 85 percent of the University’s donation and bequest funding is received for designated purposes and is required to be invested in perpetuity. In each case the income from the invested funds is available only for the designated purpose for which the funds were provided. (The total income in 2010 was $44 million and therefore the $37 million is 85 percent of the total income figure.)
- Unspent research and other Government grants of $18 million. These funds must also be quarantined for future use for the designated purposes for which they were given, and cannot be used by the University to meet other needs.
The remaining $34.7 million is not sufficient to meet the University’s capital expenditure needs.
(b) Whether there are alternative ways to achieve savings
Other savings measures are being implemented to keep to a minimum the amount that needs to be saved in academic salaries and staffing-related administrative expenditure.
Non-salary expenditure is being reduced by $28 million. This will mean that most faculties and PSUs will need to reduce their non-salary expenditure relative to their 2011 budget. Where savings are required to be made, it is envisaged that they would focus on discretionary areas such as travel, entertainment and printing. The corporate card program will also be restructured to significantly reduce the number of cards issued and limit the ability to use the card where there are preferred supplier strategies in place, for example in areas such as travel, copying and printing, stationery supplies and desktop computer purchases.
Additionally, non-essential programs have been cut, and capital expenditure will be limited to those projects that are already underway and new projects of the highest priority.
The CODCD and AIN Physics projects are the first major investment in scientific facilities on the Camperdown campus for decades, and are critical to retaining and attracting the best staff and students in the future. Additionally a significant level of specific-purpose external funding has been provided, and it is neither desirable nor feasible to return that funding. These projects are well underway and are essential if we are to remain internationally competitive for our research and teaching.
Spending on repairs and maintenance will be limited to high priority work that is needed to meet our work health and safety requirements and obligations under disability discrimination laws.
Further borrowing is not a viable option to meet operational expenditure. Borrowing is only justified in order to support projects such as the construction of new facilities, and is not an appropriate strategy to fund recurring costs such as salaries.
(c) Whether the proposed redundancies are genuine redundancies
Some staff have queried whether the assessment process for academic staff is a genuine redundancy process.
Where a reduction in positions is required, this happens through redundancies. This is the case even where some of a person’s duties will be performed by other staff. Where a reduction is to be achieved from within a particular category of staff (as distinct from, for example, the abolition of a function or program), there needs to be a method of deciding which positions are to be made redundant, and a process based on research related criteria is a valid selection method.
(d) Concerns about using research-related criteria as the basis for the academic assessment process
In a research-intensive University, research output is an appropriate assessment measure. However, as explained in the Draft Change Proposal, teaching contributions will also be taken into account, because teaching alongside research is central to the University’s mission.
(e) Need to assess research output over a longer period
Staff who are advised that their position is being considered for redundancy will have an opportunity to make submissions about the assessment of their research output, including in relation to works in progress or pending publication.
(f) Concerns about increased workloads for academic staff
Implementation arrangements at the faculty level will need to be consistent with workplace health and safety laws and the Enterprise Agreement (EA), including the workload provisions in Part G and relevant faculty workload policies. The Academic Staff Workload Monitoring Committee will monitor the operation of faculty workload allocation policies (including any effects of the proposed changes) as part of its remit under the EA.
(g) Concerns about adverse impact on students
The proposed changes in relation to academic staff have been structured to ensure that students are not adversely affected by the reduction in overall staff numbers. Teaching contributions will be taken into account and there will be scope for some staff to move to teaching-focused roles if they wish to do so, thereby providing additional resources for teaching.
(h) Concerns about increased workloads for general staff
The measures that will be proposed by each faculty and PSU will vary according to individual circumstances, such as the size of its budget reduction, existing structures, scope for greater use of shared services and other efficiencies and ongoing operational needs. Any changes to work allocation will need to be consistent with workplace health and safety laws and the Enterprise Agreement.
(i) Whether the changes will result in increased casual staff
In relation to academic staff, casual employment will be monitored to ensure compliance with the Enterprise Agreement, which sets limits on the employment of casual staff.
In relation to general staff, it is envisaged that faculties, portfolios and professional service units would review and seek to reduce their use of casual employment as a means of achieving the required savings.
The changes to be implemented are as follows:
- Overall academic staffing costs across the University will be reduced by approximately 7.5 percent. This will be achieved through a combination of measures including redundancies (which will, as far as possible, be voluntary) flexible options including pre-retirement contracts, and natural attrition. The assessment process for identifying affected staff is set out in Appendix 1.
- Faculties, portfolios and professional services units (PSUs) will be given an expenditure cap restricting the total amount they can spend on general staff salaries, casual salaries and contractors. Where savings are required, each faculty, portfolio or PSU will be responsible for formulating and implementing a strategy to achieve them, and where the implementation of strategies at the individual faculty/portfolio/PSU level involves changes to which the Managing Change provisions of the Enterprise Agreement apply, the relevant area will develop and progress its own change management proposals in consultation with affected staff.
Academic staff who are identified as meeting the criteria for an offer of voluntary redundancy or other alternative arrangements will be notified in the week commencing 20 February 2012, and will be provided with advice about the next steps in the process and the options available to them. Affected staff will be invited to provide any comments or submissions they wish to make about the assessment of their research output and any other relevant information they wish to have taken into account in the decision-making process, and will also be invited to meet with their Deans/Heads if they wish to do so. Other forms of advice and support will also be made available to them.
For general staff, further consultation will occur with affected staff at the faculty, portfolio and PSU progressively as local proposals are developed. The timing of consultation and implementation will vary across the University depending on the nature of the proposed changes.
(a) Academic staff
- Staff who are notified that they have been assessed as meeting the criteria for an offer of voluntary redundancy or other alternative arrangements will have a period of two weeks to provide comments about the assessment of their research output and any other relevant information they wish to have considered in the decision-making process. During this two-week period they may also consider whether to take a voluntary redundancy package or pursue other flexible options rather than take any further part in the redundancy assessment process. Any alternative arrangements that are entered into by staff must be on an entirely voluntary basis.
- Final decisions about arrangements for affected academic staff, including offers of voluntary redundancy, will be made in March 2012 after considering any comments or submissions made by affected staff.
- Any staff member who is offered voluntary redundancy will have four weeks to decide whether to accept the offer or seek redeployment (as provided for in the Enterprise Agreement). There will also be opportunities at this stage for staff who are offered voluntary redundancy to discuss other suitable arrangements and/or timing issues if they wish to do so, and there are also review options available to staff covered by the Enterprise Agreement. Again, any alternative arrangements that are entered into by staff must be on an entirely voluntary basis.
- Academic staff redundancies will take effect from 1 July 2012, although different dates may be agreed on an individual basis.
- When final decisions are made about which positions are being made redundant and other arrangements such as pre-retirement contracts and teaching focused roles are settled, affected staff will be consulted in relation to any proposed changes to their workload allocations. The Workload Monitoring Committee will have continuing oversight of workload allocation as provided for in the Enterprise Agreement.
(b) General staff
- As noted above, implementation arrangements in relation to general staff are to be made at the faculty, portfolio and PSU level. Implementation plans (including evaluation arrangements) will be developed as part of these local processes.
(c) Academic and general staff
- Information on the progress of the change process will be provided through reports to be published on the University website and through the Management and Staff Consultative Committee, and provision will be made for staff to provide feedback on these reports.
- The University will report to the Management and Staff Consultative Committee in December 2012 on the impact of the changes, including an assessment of impacts on workloads. The Chief Financial Officer will brief the Committee at the same time on the financial outcomes of the implementation of this Plan, and an evaluation report will be provided in February 2013.
The process for managing the reduction in academic staff will be based on relative research performance, assessed on a University-wide basis.
The assessment of relative academic research performance will be based on research outputs as defined in the Excellence in Research for Australia (ERA) guidelines, or equivalent research output as assessed by Faculty and Central Assessment Panels.
Eligible research outputs
Must meet the definition of “research” in the ERA 2010 Submission Guidelines
Must have been published or made publicly available over the period from 1 January 2009 to 4 November 2011 (the Assessment Period)
Must be an eligible research output type as defined in the ERA 2010 Submission Guidelines, for example:
- Books – authored research
- Book chapters in research books
- Journal articles – refereed, scholarly journal
- Conference publications full paper, refereed
- Original creative works
- Live performance of creative works
- Recorded/rendered creative works; and
- Curated or produced substantial public exhibitions and events.
For further information see http://www.arc.gov.au/pdf/ERA2010_sub_guide.pdf
Who is to be included in the assessment process?
The assessment process will apply to all academic staff with continuing appointments, except those in the categories listed below. Fixed-term appointees will be considered on a case-by-case basis to determine whether they are to be included in the assessment process.
The following categories of staff will not be included in the process:
- casual staff
- staff on long-term sick leave
- staff who have formal resignation/retirement arrangements in place (such as staff employed on pre-retirement contracts or who have given notice of their retirement/resignation)
- staff on existing teaching-focused contracts
- fixed-term appointees where appropriate (ie having regard to circumstances of their contract)
- staff whose salaries are wholly funded from external sources
- postgraduate fellows and other early-career researchers
- staff who joined the University after 4 November 2010.
Staff (other than those in the excluded groups listed above) with three or fewer eligible research outputs (prorated for part-time staff and staff commencing after 1 January 2009) over the assessment period will be considered for possible redundancy or alternative arrangements such as teaching-focused roles, pre-retirement contracts and other measures to avert the need for involuntary redundancy. Involuntary redundancy will be utilised only as a last resort. Staffing reductions which occur due to natural attrition will also be taken into account to minimise the need for redundancies.
Potentially affected staff are initially identified at the faculty level by a Faculty Assessment Panel comprising:
- the dean
- two senior members of the academic staff from within the faculty (such as deputy deans, pro-deans or heads of schools/disciplines)
- two members from another Faculty Assessment Panel
The Faculty Assessment Panel assesses the research performance of staff with three or fewer eligible research outputs over the assessment period, taking into account output relative to opportunity. This ensures that consideration is given to factors such as where a staff member has produced one or two substantial works, has made significant progress towards a substantial work or has appropriate works pending publication or has a publication record that is properly regarded as being the equivalent to more than three ERA-rated publications; career breaks such as parental leave or sick leave; disability or illness; performance of ‘above load’ teaching or administrative duties allocated by the faculty; and the staff member’s length of service in the position. Consideration would also be given to situations in which staff are undertaking teaching and postgraduate supervision work that their school must provide in 2013 and which could not be provided through other means.
Assessments made by the Faculty Assessment Panels are reviewed by a Central Assessment Panel, comprising the Provost (Chair) and three senior professors. Oversight by a Central Assessment Panel will ensure a fair and consistent process across the University.
Affected staff will be invited to provide any comments or submissions they wish to make about the assessment of their research output and any other relevant information they wish to have taken into account in the decision-making process. Staff will have time to provide written comments and submissions, and may also have further discussions with their Deans/Heads during this period.
The Central Assessment Panel would make recommendations to the Vice-Chancellor in relation to the selection of staff in each faculty to be offered voluntary redundancy.
Final decisions about arrangements for affected academic staff, including offers of voluntary redundancy, will be made after considering any comments or submissions made by affected staff. There will also be opportunities for staff who are offered voluntary redundancy to seek redeployment and discuss other suitable arrangements (such as pre-retirement contracts, teaching-focused roles or part-time work) and/or timing issues if they wish to do so. Final arrangements will depend on the relevant faculty’s operational needs and budget constraints, and any alternative working arrangements must be entered into by staff on an entirely voluntary basis.