Ofcom Consultation: Strengthening Openreach’s Strategic And Operational Independence

CWU has issued a press release today in response to Ofcom’s consultation published today on the future governance of Openreach. 

The report believes that BT Group has retained control over Openreach’s strategic decision making and therefore Ofcom has concluded that there requires key changes in the way Openreach is governed. 

The main proposals which affect our members are:

• That Openreach becomes a distinct company as a wholly owned subsidiary of BT plc, with its own purpose, board of directors and governance arrangements.
• Openreach will have greater autonomy, budgetary control and decision making powers
• Openreach employees would work for Openreach and therefore be employees of the new company, rather than employees of BT Group.

The CWU have legitimate concerns over the proposed model and at this stage we are sure if the current suggested model goes ahead it will certainly involve complex major TUPE transfer of all 32,000 employees in Openreach. 

There will also be a knock-on effect to the BT Pension Scheme. Ofcom recognise this stating that any transfer of employees should seek to mitigate any impact on the BT Pension Scheme.  

It also states that it would explore alternatives such as employee service agreements – which involves BT employees contracted to work for and on behalf of Openreach.

The CWU have met with Ofcom on several occasions to raise our concerns about any changes to governance and the impact this could have on limiting career development or people movement, or change the position of existing employees’ terms and conditions. 

These points have been noted in the document and Ofcom believe that Openreach can become an incorporated company in ways that do not cause any detriment to current employees.

At this stage we need to understand the complexities in what is being proposed.  As a consequence we will be seeking legal advice as well as meeting further with the regulator before making a submission to the consultation which closes on 4 October.

Source: CWU