2 August 2007

This submission has been prepared on behalf of, and based on the views of Finsec members working in the Westpac branch network.

The following submission covers four key areas of interest to Finsec in relation to the Branch Operating Model proposal:

• Comparability of the new roles to existing roles.
• Branch structure issues.
• Role structure issues.
• Training needs.

The information collected for this submission comes from an interview process conducted with Finsec members in pilot branches in late 2006, and from a survey of all Finsec members in July 2007.

Overview

Finsec members generally support the roll out of the proposed model, subject to Westpac addressing key issues raised by staff. Seventy six percent of staff surveyed from pilot branches indicated this when asked in late 2006, and Eighty one percent of sites indicated this when surveyed in July 2007.

Importantly, one hundred percent of sites surveyed in July 2007 indicated that they would be opposed to the new model if Westpac did not respond to key issues raised by staff.

While a range of issues have been raised by Finsec members, key concerns were extremely consistent and are reflected by the four areas covered by this submission.

Finsec is of the view that a change of this scale will be disastrous if staff concerns are not addressed. The results of a failure to respond to staff concerns would be a lack of buy in, lowered morale, higher turnover, a loss of functionality on the frontline, and ultimately the failure of the model to deliver the gains it is supposed to.

Conversely, the high number of Finsec members stating that they are open to the change if listened to, presents a great opportunity for the bank to embark on a major change to its operations, and build the support and morale of staff at the same time.

Comparability of Roles

•  Finsec position

Finsec has maintained throughout the process of piloting and consultation, that the new CSO and CC1 positions are not directly comparable to any existing branch positions under the terms of the Collective Agreement.

•  Definition of directly comparable

This position is based on the definition of "a directly comparable position" in Section 42.1 of the CEA. For a position to be directly comparable, it must have "the same grade and salary" as the existing position. While we note (and support) Westpac's proposal to allow people moving into the new positions to keep their current grade if it is higher than the grade for the new position, the definition of directly comparable requires the actual role (not just the person filling the role) to have the same grade. In the case of both the CSO role (grade A+) and the CC1 role (grade B+), both have grades that are different to other branch roles, and therefore are not comparable.

•  Effect of non-comparability

The effect of this is that contractually, we believe that existing staff cannot be required to move into the new roles. CSO and CC1 positions will need to be filled either by existing staff who consent to changing their roles, or new staff.

In the event that Westpac wishes to implement the new operating model (thereby abolishing the CS position in that branch), CS's will either need to be provided with directly comparable alternative positions, or redundancy compensation.

Branch Structure

•  Provision of relief

Finsec members have strongly raised the importance of adequate relief staffing as a major factor in making the proposed model work.

Given the role of the CSO in supporting both the teller and enquiries areas, unfilled absences are likely to create significant queues in all parts of the branch, and lead to significant decline in customer service. Recent Finsec research revealed that in May 2007, only 18% of absences in service areas were covered by relief staffing. A continuation of this low level of cover will lead to a failure of the new operating model to deliver improved customer service.

As such we believe that progress on providing more adequate relief staffing, as per recommendations from the branch resourcing review working party, is a necessary component of the proposed model.

•  Layout

Feedback from both the pilot branches and Finsec members in other branches has identified the importance of branch layout in determining whether a branch is suitable for roll out of the proposed model.

In particular, the proximity of the tellers and enquiries areas to one another is important. Clear lines of vision and a relatively short distance between the two areas are important as the CSO needs to regularly move between them in order to respond to customer flow. In pilot branches where these areas were out of site from one another, or a long distance apart, CSO's reported that many of the benefits of the role are lost, and staff have to end up running in the banking chamber in order respond promptly to customer needs.

With the potential for more staff to be at the Enquiries area at any one time than is likely now, it will also be necessary for adequate private space and desks to be available for CSO's and CC1's to service their customers. The efficiencies that the proposed model is designed to deliver will be lost if CSO's and CC1's are unable to access a desk and equipment to meet a customer enquiry. The recent branch resourcing review process has revealed that this happens under the current model, and it will be exacerbated under the new model unless branch layout is altered accordingly.

This additional private space will also be necessary on many sites to enable an increased number of staff to complete non-customer facing work such as PACT calling.

Several branches have also identified that they only have enough cash drawers for the current number of tellers. Given that CSO's would move away from the Enquiries area to the tellers lineup at busy transactional periods to improve service levels, there may be some sites that require the installation of additional cash drawers to cater for this.

Finsec strongly recommends that resource is put into ensuring appropriate branch layout prior to roll out of the model.

•  Equipment

In addition to the provision of adequate space and desks to support the new model, sufficient equipment will need to be allocated. This will include enough computers for CSO's and CC1's to access, enough PIN machines for CSO's to use when there are multiple cards enquiries, and adequate signage to direct customers to the right area.

Again, a failure to provide this equipment would result in a loss of the efficiency gains that the new model is supposed to bring about.

•  Size of branch

The general consensus (with some exceptions) of Finsec members is that the proposed model is most appropriately applied to large branches.

However, a number of small branches have raised the issue that currently, many staff work as de-facto CSO's, and move back and forth between the two areas to cover breaks and to meet customer flow. With the introduction of the new model, it would be iniquitous to not recognise this fact. It is our view that if the model is rolled out, consideration will need to be given to financially recognising tellers in small branches who consistently work in this way.

Role Structure

•  Further Information

A common request from Finsec members has been for the provision of more information about the new roles and how they will function. In particular, we would submit that full position descriptions and detailed target information be provided to all sites in order to allow a fuller understanding of how the roles are structured.

•  Impact on Customer Consultant role

A common concern is the impact that the new CC1 role will have on the existing CC role.

The CC1 role will fulfill a number of functions that are currently completed by the CC. Given that many of these functions (ie: Personal Loans) are measured in the target system, and have consequences in terms of remuneration, a larger group of staff covering these functions has the potential to adversely impact existing CC's. In particular, CC's in branches which already have an HLS feel that the introduction of the CC1 role may result in the scope of the CC role in those branches being squeezed into a very narrow area of operations. This would lead to lower work satisfaction, and financial disadvantage.

Finsec strongly believes that in branches where the CC1 role is being introduced, targets for CC's must be reduced accordingly in those areas where there is overlap between the roles.

•  Team Targets

The introduction of the CSO role makes the setting and measuring of individual targets extremely problematic. The CSO will move back and forward between the tellers and enquiries area in a way that will not necessarily be predictable. If individual targets are set for each CSO based on an expectation as to the amount of time spent in each area, but then for a range of reasons the CSO spends a dis-proportionate amount of time in a given quarter in one particular area, then the staff member concerned is potentially disadvantaged.

A potential solution to this is to expand the current arrangement that allows tellers the option of a team target in place of individual targets. The option would need to be expanded to allow branch service teams to select team targets in place of individual targets.

•  70/30 split

The proposal to guarantee existing staff who move into the CSO position a 70% portion of time in the area from which they originally came is seen as a useful suggestion by Finsec members, but there are concerns about how this can practically be given effect.

To a large extent, movement between the two areas will be governed by customer flow. The dedication of staff to providing high levels of customer service means that staff will generally move to the area required to respond to customer need, regardless of how this will impact on the time spent in each area.

We believe that more discussion and detail is required to ensure that the 70/30 split proposal can provide the certainty it aims to, and be practically implemented.

•  Branch Service Manager

Further information is required around the structure and nature of this role.

Clarity on reporting line responsibilities is needed. While it is clear that Tellers and CSO's would report directly to the Service Manager on day to day operational matters, it is not entirely clear if there are other matters, the responsibility for which are passed to the branch manager (ie: hiring, disciplinary matters etc...). Finsec believes that clear information needs to be provided that sets out the different responsibilities of the Service Manager and the Branch Manager.

Additionally, the position of existing team leaders is unclear. We request clarity on whether TL's would remain in their current roles with the introduction of the Service Manager role, or whether the Service Manager role would be in place of existing TL's. If it is the later, clarity on the selection process is required. Finsec believes that existing TL's should have the option of moving into these positions.

•  Meet and Greet Role

The introduction of the CSO position raises questions about the future of the Meet & Greet role. With more staff available to work in the enquiries area under the new model, Finsec members would like clarity around whether the M&G role will continue in its current form, or whether M&Gs will move into the CSO role.

Indeed, Finsec believes that in many cases, M&Gs are effectively acting in a capacity that is comparable to the new CSO position, and that the A grading they currently receive is inequitable.

We request clarity on the future of the M&G role, and submit that existing M&G's should be offered the opportunity to upgrade to CSO's.

•  CC1 Targets

The proposed points target for the CC1 position is 10, 000 points annually.

Finsec members strongly feel that this is too high for an entry level sales role. In many cases, staff moving into the role will have had no sales experience and will be over time, building up the skill set required for the role. This relatively high points target will place undue pressure on them to "race" for as many points as possible. This may come at the expense of learning the role properly, and is likely to lead to mistakes and a decline in quality service.

Additionally, Finsec believes that the annual target of 10, 000 points may make it difficult to attract staff into the role. The CC1 role is an entirely new position, and we believe it would be prudent for the bank to initially err on the side of caution in setting targets.

We would propose that the 10, 000 annual points target be reduced significantly for the roll-out of the new model, and be reviewed in consultation with staff after two quarters, by which time the role will have bedded in, and it will be clearer what a reasonable target actually is.

Training

•  Prior training

The biggest single concern of Finsec members arising out of the proposed new model, is for adequate training to be provided for people moving into the new roles. In particular it was noted that tellers shifting up into the CSO role and CS's moving up into the CC1 role have significant training needs.

Staff participating in the CSO pilot have identified the lack of prior training for staff moving into the new role as the major failing of the pilot. In many of these branches training was almost entirely conducted on the job, leading to confusion and a high level of stress for existing Supports, who had to balance the demands of their role, with guiding new CSO's in their work and fixing mistakes. It would in our view be unacceptable for Westpac to rely on the goodwill of existing staff in the same way if the model is rolled out on a wider basis.

We commend Westpac for recognising the importance of prior training in the presentation made to staff in July, based on feedback from the original pilot.

Finsec strongly recommends that a full training programme is developed and implemented for staff moving into the new roles. This training needs to be provided prior to implementation of the new model, so that staff are fully equipped with adequate skills to perform in their roles from the outset. Given the significant volume of training required to move into one of the new roles, we recommend that at least part of this training (where possible) be conducted off-site away from the pressures of ongoing work. Where training is conducted on-site, adequate relief cover needs to be brought in to avoid additional stress being placed on staff.

•  Existing staff

Additionally, and in the interests of equity, aspects of this training should be made available to other staff (ie: Supports in branches not changing model) who identify a need.

Other Feedback

•  Right conditions for roll-out

Finsec members strongly believe that the conditions need to be right on a given site for the new model to work effectively. We are of the view that it is better to take some time to get these conditions right prior to roll-out of the new model, rather than going ahead with the new model, and then attempting to address these issues. Issues relating to branch structure, provision of equipment, and adequate training are particularly critical aspects of successful roll-out that need to be implemented before the change occurs.

While this may delay roll-out in some areas for a short period, the long-term benefits of a successful roll-out vastly outweigh the costs of a slightly slower roll-out.

•  Selecting the right branches

Finsec members have identified that while the proposed model may deliver significant efficiency and service benefits in some branches, it is ill-suited to other branches. Westpac's approach to date has supported the view that there is not a "one size fits all" branch model, and that there is no plan to roll out to every branch. Finsec strongly supports this approach.

•  Phase two consultation

Phase two consultation will involve specific sites being consulted about roll-out of the model in their branch.

We re-iterate our view that the non-comparability of new and existing roles requires existing staff to either consent to changing roles, be found an alternative comparable role, or be offered redundancy compensation.

Finsec members are concerned that undue pressure may be placed on individuals to change roles by managers, resulting in people feeling forced into accepting roles that they are not comfortable with. This would be a negative outcome for both the individual and the bank.

We request that Westpac confirms to staff and managers that no undue pressure be placed on staff to change their role.

Summary of Key Feedback

1. Generally speaking, Finsec members support the roll-out of the proposed model if Westpac addresses key issues raised by staff (1).
2. Unanimously, Finsec members are opposed to roll-out of the proposed model if Westpac does not address key issues raised by staff (1).
3. We do not believe that the new CSO and CC1 positions are directly comparable to any existing branch role (2a).
4. In roll-out branches, Customer Supports will either need to voluntarily accept a new role, be found an alternative directly comparable role, or provided with redundancy compensation. They cannot be forced to change into one of the new positions (2c).
5. The recommendations of the branch resourcing review, particularly in relation to relief staff, are a necessary component of successful roll-out of the proposed model (3a).
6. Finsec strongly recommends that resource is put into ensuring appropriate branch layout and provision of adequate equipment prior to roll out of the proposed model (3b & 3c).
7. Consideration needs to be given to financially recognising tellers in small branches who already act as a de-facto CSO (3d).
8. Full position descriptions and proposed targets for each of the new roles to be distributed to all sites (4a).
9. Where the new model is rolled out, Customer Consultant targets need to be appropriately reduced in those areas where there is overlap with the CC1 role (4b).
10. Allow service teams to select a team target in place of individual targets (4c).
11. Further discussion is required on practical aspects of the proposed 70/30 split of CSO duties for existing staff (4d).
12. Clear information about the different responsibilities of the Service Manager and the Branch Manager needs to be provided (4e).
13. We request clarity on the position of existing TL's in roll-out branches, and recommend that if these positions are being replaced by the Service Manager role, that TL's have the option of moving into these roles (4e).
14. We request clarity on the future of the M&G role, and submit that existing M&G's should be offered the opportunity to upgrade to CSO's (4f).
15. We propose that the 10, 000 annual points target for CC1s be reduced significantly for the roll-out of the new model, and be reviewed in consultation with staff after two quarters (4g).
16. We strongly recommend that a full training programme is developed and implemented for staff moving into the new roles, prior to roll-out (5a).
17. Where possible, this prior training should be conducted off-site (5a).
18. Where other staff identify a training need, they should also be offered this training (5b).
19. Issues relating to branch structure, provision of equipment, and adequate training need to be dealt with before roll-out (6a).
20. Finsec supports Westpac's stance that the model will not suit all branches (6b).
21. We request that Westpac confirms to staff and managers that no undue pressure be placed on staff to change their role (6c).
22. A Finsec survey of relief staffing in Westpac branches over May 2007 revealed that across respondent sites, of 906 days of staff absence in service areas, relief was only provided on 163 days.

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