Capita O2 and Tesco Mobile contract members urged to reject 4% pay snub

Telecoms & Financial Services, Capita

Preparations are being made for a consultative ballot of members across the Capita O2 and Tesco Mobile partnerships following the company’s reiteration this week of a derisory 4% pay offer.

Despite previous indications from Capita that it was reconsidering its position after the CWU national negotiating team’s unanimous rejection of an identical offer on July 6 – sparking now dashed hopes that a breakdown in talks could be averted – management has belatedly confirmed that its 4% offer is ‘final’.

As such, negotiations have now concluded without agreement – signalling the start of a similar industrial relations impasse with Capita to the one involving the CWU’s TV Licensing membership on the postal side of the union. There a near identical pay dispute is currently in last-ditch mediation after the failure of initial talks with independent arbitration service ACAS to break the deadlock. (See story here)

“This is a disappointing turn of events,” stresses CWU national officer for members in the Capita O2 and Tesco Mobile partnerships, Tracey Fussey.

“Despite the informal indications we received last month that the company was reviewing its position on the 2022 pay review in light of the deepening cost of living crisis – and an earlier joint statement in which Capita stated its ‘wish to find a way forward with the pay negotiations’ – we’ve clearly not received a pay offer that we can recommend to our members.

“As such, we’ll now be conducting a consultative ballot in which we’ll be recommending outright rejection of what amounts to a severe pay cut in real terms.

“Members are facing major cost of living challenges with astronomical increases in utility bills, fuel and food prices and an increase in National Insurance contributions. We’re already receiving reports of our lower paid Capita members having use foodbanks to make up the shortfall – so there’s never been more of a need to achieve a pay increase that ensures our members’ living standards do not deteriorate further.

“As such, we’ve responded to Capita outlining the reasons for our rejection of their offer – which, in essence is due to the headline pay increase being significantly below the current inflation rates of RPI at 11.8% and CPI at 9.4%.

“Our submission to Capita also sought an increase for those members on the Real Living Wage (RLW), who’ve been particularly hard hit by the cost of living crisis over many months. However, the company has declined to provide any increase for these members – despite the fact that the Living Wage Foundation’s announcement of new RLW rate, normally made in November, is being brought forward to September in response to the cost of living crisis.”

The extent of that urgency was further underlined by yesterday’s Bank of England announcement that inflation is currently on course to top 13% in October, with the Resolution Foundation think-tank (which sets the RLW) predicting that it could hit 15% by the start of next year.

Choice – not affordability…

Financial data and Capita’s own bullish pronouncements on its commercial performance directly contradict management’s claim that the real-term pay cut currently on the table is the most the company can afford.

The company’s own full year results, published in March, detail a 1,631% increase in adjusted pre-tax profit to £93.5m – an increase of £88.1m on the previous year. The same data reveals a total contract value of £3.8bn was won in the same period, a 31% increase on 2020.

At the time, CEO Jon Lewis stated: “None of this would have been possible without our people, whom I would like to thank for all their hard work, commitment and professionalism.”

On Tuesday (August 2), in an update for employees on the progress of ‘Future Capita’ post-reorganisation, the CEO added: “We have started to grow revenue again for the first time in six years; and we remain on track this year to deliver positive free cash flow and to materially reduce our levels of debt.”

And just this morning (Friday August 5) the huge scale of that debt reduction  – down by £169.4m to £710.4m, compared to £879.8m in December 2021 – was revealed for all to see in Capita’s half year results. 

An upbeat video statement from Jon Lewis accompanying the financial statement once again stressed that “none of this would have been possible without the commitment of our 52,000 colleagues across the organisation” – blind, it seems, to the irony that some of those colleagues are now having to use foodbanks in the starkest possible demonstration of the scourge of in-work poverty in the UK today.

In separate bulletins that were issued to Capita O2 and Tesco Mobile partnership members yesterday, Tracey Fussey concludes: “Capita needs to think again about its responsibilities to our members whose commitment to provide excellent service at the frontline of the customer interface is absolutely essential to the company’s ongoing success.

“This is not a matter of affordability. Capita can afford to pay you more – and you deserve more!”

  • Members should watch out for more information on the forthcoming consultative ballot and invitations to a number of virtual members’ meetings that will be held in the coming weeks.