British Gas employees are on the verge of striking following the company’s controversial ‘fire and hire’ plan.
The GMB Union held a consultation ballot of 10,000 employees at the Centrica-owned utility and PH Jones – a part of British Gas concerned with heating – and found that 95% voted for industrial action on a turnout of 67.5%.
This paves the way for a formal strike ballot in Autumn, as employee confidence in the company has been badly hurt according to the union.
In July, British Gas announced its intention to fire and rehire its entire 20,000 strong workforce unless they agreed to changes in their pay and terms and conditions. Centrica said the plans were an ‘insurance policy’ according to GMB, and issued statutory and s188 notices HR1 – both forms of advance notification of redundancies – which mean the process could begin as early as November.
According to the supplier, the ‘fire and hire’ action is a last resort however, and it has simply taken the step of issuing such notices to unions and employee reps. It raised the issue early on in response to communications with unions when they stated they would decline all offers put on the table.
As the Unison union put it: “Our hard fought for Terms and Conditions could be under threat, and we will all need to fight to keep them.”
Justin Bowden, GMB national secretary, said Centrica bosses are “holding a box of matches and threatening to set fire to the terms and conditions of this loyal and dedicated workforce.”
“It’s a complete and utter betrayal of the British Gas and PH Jones brands. Today’s 19 to 1 vote demonstrates GMB members are not prepared to tolerate fire and rehire threats and are determined to have their own “insurance policy” too.
“British Gas was an historically proud British institution – but Centrica’s beleaguered management are betraying a once great brand - and their entire workforce," Bowden continued, adding that it's time “for the Centrica Board to wake up and smell the gas".
The vote follows 5,000 redundancies announced in June, as the company works to restructure itself in an effort to become "leaner". This was due both to the impact of COVID-19 and a long term economic struggle.
In July, the company announced its operating profit had fallen by 14% in the first half of 2020, pointing to the impact of COVID-19. Centrica slumped to a £849 million loss in 2019, a performance it blamed on Ofgem’s energy price cap for creating a “challenging environment”.
This followed on from Centrica’s 2018 financial results sending its share price tumbling to a 20 year low, after it confirmed that the incoming price cap would create challenges for the company. While the previous annual financial statement led to the company cutting over 4,000 jobs when it was released in February 2018, due to the company’s “weak” performance.
Speaking to Current±, a Centrica spokesperson said the company is aware that change can be difficult and it is doing all it can to support its staff, “but we urgently need to act now to win back customers, grow our company and protect more jobs in the long run".
“We are committed to reaching a negotiated settlement this year which sets us up for future success, and we hope our unions – who have also agreed that change is needed - share that desire as we continue our ongoing negotiations.
“Our colleagues’ base pay and pensions will be protected, but simplifying and modernising working practices and their terms is essential if we’re to become more flexible in delivering for our customers - giving them what they want, when they want it, at a price they’re willing to pay.’’
The company cited challenger competition eroding its market share and squeezing profitability, with the company having lost over a million energy customers in two years and losing over half its earnings in the past ten years.
Current terms and conditions are limiting British Gas’s ability to be flexible, the company suggested. For example, if an engineer is located close to a customer, the company can’t send that engineer to them because of barriers included in terms and conditions, it continued.
GMB’s criticism comes just days after Unison general secretary Dave Prentis wrote to MPs calling for their support of British Gas employees given the “appalling fashion” with which they’ve been treated.
“What Centrica is now trying to achieve, and its rationale for doing so, lacks integrity and in its current shape will provoke a serious dispute…” wrote Prentis.
“We know that any industrial dispute will be damaging to all parties concerned, but ultimately if the changes the business is seeking to impose are not significantly improved, a dispute is a likely outcome, providing that this what members decide in a legal industrial action ballot.”
British Gas has stated that conversations with unions have been constructive so far, and that it remains optimistic that an agreement over changes to terms and conditions can be met in the next couple of months. S.188 will only be used if negotiations end up stalling or are at a standstill, giving the supplier an option to proceed.
“Centrica’s problems were not caused by the loyal engineers, call centre workers and back office staff who have done everything asked of them over years of boardroom mismanagement, but yet again it’s their jobs that are in the firing line,” finished Bowden.
“GMB members have spoken loud and clear in delivering their verdict, now it’s time for the company to listen and get real.”