On the day that Capita has announced its half year results (Thursday 21 September) Unite, the union representing staff at Capita, has said that staff have voted ‘Yes’ in a strike ballot and will be taking part in industrial action. Capita is attempting to close the current defined benefit scheme and transfer staff to a defined contribution scheme.
Staff at Capita have voted overwhelmingly in favour of strike action in a ballot calling on their employer to give them a decent pension. In the industrial action ballot 95 per cent of members voted for strike action, on a turnout of 72 per cent.
Unite has now informed Capita that Unite members will be taking six continuous days of strike action starting on Thursday 5 October 2017. Unite conducted an industrial action ballot following the proposal to close the current defined benefit scheme. In June Capita informed its employees of significant changes to the pension arrangements. Staff in the scheme will suffer a massive cut in their retirement income as a result of the proposals.
Dominic Hook, Unite national officer, said: “The disgraceful plans by Capita to slash the deferred pay that staff will get in retirement is utterly unacceptable. Capita’s pension proposals will have far reaching consequences for the retirement of many Unite members. Some staff will lose a shocking 70 per cent of their retirement income.
“Capita has once again put the interests of shareholders before those of its staff. Unite members want to know how a highly profitable company such as Capita can undermine the morale and loyalty of hard working staff by proposing to remove their defined benefit pension whilst at the same time paying off a failing chief executive. There is no justification for highly profitable Capita to treat its workforce in this manner. The extremely high vote in favour of strike action shows how strongly members feel about this.
“Capita must urgently rethink these pensions proposals in order to prevent industrial action.”
The union is calling on the companies which outsource contracts to Capita to intervene to settle this betrayal of staff facing the loss of a significant proportion of their retirement income.
At the same time Capita’s former CEO Andy Parker has left early, with a reported pay off of 12 months’ salary for his notice period (£600,000), as well as £45,000 as compensation for pension and other benefits. He could also receive a bonus of double his salary for each day worked in 2017 if approved by the board.
If Capita implements this proposal, then Unite has a real concern that it will open the door to further attacks on the other company pension arrangements. The Capita sites where Unite members are impacted are: Birmingham (two locations); Reading; Bristol; Manchester; Stirling; and Belfast.
Unite members who are affected are employed by Capita Life & Pensions Regulated Services Ltd, there are also some employed in Capita IT Services Ltd. The following Capita contracts will be affected: Prudential; Royal London CIS; Phoenix / Royal London (Birmingham); Friends Life; Specialist Services (all sites); IT Programmes /projects (all sites)
There are also some employed in Capita IT Services Ltd and Capita Employee Benefits
For further information contact Saba Edwards on: 07768 693 953.
Notes to editors:
Case study 1: 60 year old aims to retire at 65 (normal retirement date) - Their salary is £25k and they currently pay 3% into the scheme. If they remain in the current scheme, their pension earned in those final 5 years is around £2k per year. If they are moved to the new scheme, and continue to pay 3%, then their pension earned in those final 5 years is projected to be around £350 per year. This is a loss of around £1,650 per year. If they are in retirement for 20 years, a total loss of about £33k.
Case study 2: 35 year old the employee is currently paying 7% into the scheme - The projected pension from this, were they to remain a member until retirement, would be around £22k pa. On being moved to the new proposed scheme, and paying 6% until retirement, their projected income is around £7k. Along with a deferred pension of around £4k, their total pension is now around £11k – roughly halved. If this colleague is in retirement for 20 years, they will lose a total of almost £220K.
- Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.