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Industrial action sought as 31 jobs at Co-operative Financial Services are to be moved from Manchester to India

The financial services arm of the Co-operative (CFS) and French IT services supplier Steria are facing industrial action to halt the move of 31 jobs from CFS’s Steria-run operations in Manchester to India.

Unite, the UK’s largest trade union, issued a statement this week calling for the proposed ‘compulsory redundancies’ to be scrapped after formal negotiations with Steria and CFS broke down.

According to the Unite statement, Steria announced its intention to move 90 jobs from the Manchester office to India in order to cut costs earlier this year. It initially offered employees voluntary redundancy, but only 54 employees accepted. The company then announced a compulsory redundancy programme.

“Unite is determined to resist compulsory redundancies in Steria (particularly in the present economic climate) and wants to discourage Steria from offshoring more work and reducing the headcount even further,” the statement reads.

“We have failed to stop the compulsory redundancy programme by normal means and we now feel we have no option but to ballot for industrial action and to campaign more widely on the issue.”

In a statement, Andrea Hawkins from Steria UK’s HR department, who works on the Co-operative Financial Services Account, said, “Our Co-operative Financial Services account has been reviewed to ensure we strive to develop and maintain our high levels of competitive service and efficiencies. A very small number of UK posts have been identified as at risk of redundancy. This represents just 0.6% of our 5,000 UK workforce.
 
“We are disappointed that in this instance Unite has felt it necessary to ballot members on the Co-operative Financial Services site,” the statement continued. “Steria is in close talks with Unite and redundancies are identified not in terms of potential profit but in the real business context of making this business unit more competitive and streamlined, thereby safeguarding other crucial UK-based roles."

Culture clash

Steria came late to the practice of offshoring to India. For one, the company was historically constrained by anti-offshoring sentiment among continental Europe’s public sector organisations, which make up a significant proportion of its customers.

Secondly, the company is majority owned by its own workforce and the executive management board is answerable to a superior board that represents the workers – reflecting the company’s past as a conglomerate of mothers working from home. It is therefore less likely to pursue strategies that can be perceived to infringe upon workers’ rights.

That began to change in August 2007, when Steria acquired UK IT services provider Xansa, half of whose staff were located in India and which had been successful in selling offshore services to previously reluctant customers.

The acquisition signalled a thawing of attitudes towards offshore outsourcing – at least among Steria’s executive management and its customers. But as Unite’s statement demonstrates, the company is not able to move jobs to its Indian sites without complaint from the workforce.

An unforeseen upshot of the current economic crisis seems to have been a strengthening in the resolve of unions representing UK-based IT services workers. Last month, Unite called for Lloyds TSB to be withdraw from its offshore commitments following the news that the bank was to merge with HBoS – the company would save money in redundancy payouts by keeping its onshore workers, it argued.

Meanwhile, India’s own BPO workforce has been gaining union representation in the form of BPO Union, an organisation that aims to expose employment disputes to the shareholders of Indian BPO companies. Given Steria’s unusual ownership, this is a strategy Unite may, ironically, employ itself.

Further reading

Steria finds its soul mate in Xansa
A public sector IT services love story

Lloyds TSB told to scrap offshoring by workers

Indian BPO workers form online ‘union’

Find more stories in the IT Services Briefing Room