Prospect members on the Tesco Mobile and O2 contracts have been among those under pressure because of Capita’s financial difficulties, but the union has provided vital support for individuals during this difficult period, explains John Ferrett
It is now over two months since the Capita corporate business decided on a number of restructuring and job reduction exercises to cut costs.
The company’s financial difficulties were highlighted earlier in the year with a dramatic fall in the share price, wiping £2bn off the value of the business. Since then, Capita does appear to have stabilised and while the share price remains well below where it was, the company has been able to raise £700m by issuing new shares.
For employees across Capita’s various contracts, the requirement for the business to cut costs has had a number of impacts.
Our members on the O2 contract were denied bonus payments. Meanwhile, members in Tesco Mobile were given a pay award below that awarded in other parts of Capita and also saw their bonus payments reduced. However, it was only through Prospect’s intervention that an even more punitive approach to pay was prevented.
When the company announced redundancies across the business two months ago it refused to consult with Prospect, despite there being a recognition agreement with the union for the the O2 contract, where posts have been affected.
Instead, Capita used the letter of the law to argue that collective consultation with the union was not required and chose to appoint an employee representative committee to handle this. This committee was not independent of the company and representatives were not able to call on the support of professional trade union officials to assist them with the consultation.
Prospect has maintained that this approach not only constitutes bad faith but is also ultimately counter-productive. Indeed, the union will always seek to be constructive during redundancy consultations and has a great deal of experience in working with businesses undergoing reorganisations.
For example, this experience could help the business to avoid making decisions that may leave them open to challenge, for example in an employment tribunal.
However, Capita’s refusal to collectively consult did not stop us from representing “at risk” members as individuals.
In fact, Prospect sought and secured an agreement that ex-Telefonica members would be paid their reserved redundancy terms, even though these had only been guaranteed under TUPE for one year. Affected people in this group will receive three weeks’ basic pay per completed year of service, capped at 52 weeks – an improvement on statutory terms.
So despite the refusal to collectively consult, Prospect has still managed to maintain a dialogue with the company on behalf of its members.
At first Capita would not share redundancy figures with us, but when formal collective consultation ended on 22 June, we did receive the figures. By the third week in July, 35 people were still at risk of redundancy from the 79 originally placed in this position, many of whom we helped.
Of the remaining posts, 32 job losses are linked directly to work being offshored. The company has said it will not issue notice of redundancy for these until offshoring dates are confirmed. The remaining three redundancies are due to UK “efficiencies” and notice has already been given to those affected.
Members in Tesco Mobile have also felt the impact, only receiving a pay award of 1.5% earlier this year, less than expected. Capita also unilaterally reduced the bonus pot by 30%, despite that contract being particularly successful and high performing.
Prospect is now in discussions with Tesco Mobile on a range of topics as the business draws up a plan to satisfy corporate demands for cost savings and customers’ desire for improved service levels. Formal consultation will begin with Prospect and employees in the next few weeks.
These developments have shown the absolute need to be trade union member in Capita. The company is under huge financial pressure, as shown by its decision to offshore parts of the call centre business. Only time will tell whether such measures can stabilise the business.
Meanwhile, as staff continue to face massive uncertainty, Prospect can offer the professional support and advice they need, so we urge every non-member to sign up. You can do so at prospect.org.uk/join
- John Ferrett is an assistant national secretary for the communications and digital division in Prospect