A decision by Spark to give around 1900 employees five days to sign a new employment contract or leave the company has been labelled "very tough" by a trade union leader.

Richard Wagstaff, president of New Zealand Council of Trade Unions, told the Herald he didn't support or condone Spark's way of managing change.

"I think it's a very tough way of doing changes," Wagstaff said.

"I don't think it's ethical either … it's hard-nosed and really putting pressure on staff," he said.

Advertisement

"I would describe the prospect of nearly 2000 people getting an ultimatum an improper and undesirable way of managing change."

The move affects almost 40 per cent of Spark's workforce.

Spark spokesperson Lucy Fullarton told the Herald that new contracts were shared with affected staff members in the past few days after several months of discussions and formal consultation.

"We have been discussing this with our people for several months, including formal consultation over recent weeks with affected people on proposed changes to their roles," Fullarton said.

"The new contracts were shared with affected staff in the past few days. As per our standard process, we are giving employees five working days to consider their new contract."

The move by Spark comes after it accelerated its transformation programme, dubbed "Quantum Programme", aimed at reducing costs through simplification, digitisation and automation.

Part of this involves moving to a new operating model known as an 'Agile' model — a methodology that has been used for a number of years in the software industry.

"The transition to Agile particularly affects the parts of the company that comprise our 'engine room' (the core functions such as network, IT, product development and marketing), which collectively involve almost 40 per cent of our total workforce," Fullarton said.

"For these employees, the shift to Agile will mean significant changes to their titles and roles, the way they work and how they are organised.

"As their old jobs will be no more and these employees will have new roles in the Agile structure, we need to offer them new employment agreements."

The Auckland-based company had flagged bringing forward the move at their half-year results and again in a statement at the end of May.

"We had originally planned to scale up to Agile, but in recent months it has become clear there are real benefit for our customers in speeding up the transition," Fullarton said.

"We think this new way of working will allow us to organise our business around the things that matter most to customers, to speed up bringing new products to market, and to improve our culture and empower our people through collaborative and highly productive teams."

Fullarton said those who decide the new way of working, and the new roles, are not for them will have the opportunity to take voluntary redundancy.

"We have been saying for many years that for our business to succeed in the competitive telco market, then costs must come down," she said.

"As we have said openly for many months, this programme will result in fewer jobs."

In a statement last month, Spark said the acceleration of the programme was expected to strip out an extra $30 million of annual labour costs, which was anticipated to reach $90m by December 31, when annualised labour costs will be about $470m, according to a statement by the company last month.

Spark's wage bill was $278m in the six months ended December 31, 2017, when it had 5614 full-time equivalent employees and 230 contractors.

The Quantum programme, which kicked off in May last year, made up $13m of Spark's $282m in operating expenses.