The 200 Friends Provident IT workers that are transferring to
IBM, as part of the firm's £200m outsourcing deal with IBM, will
have to sign new contracts or take voluntary redundancy.
The IT outsourcing contract, which includes all software,
hardware and services, is part of Friends Provident's overall plan
to save £40m a year in operating costs.
Trade union Unite, which represents the workers said there will
be no compulsory redundancies. "The staff being transferred from
Friends Provident can either transfer to IBM or they can chose to
take voluntary redundancy," said aspokesman.
But a source close to the deal said that three quarters of the
IT staff that transfer to IBM from Friends Provident will lose
their jobs. "It is of grave concern to me that this contract will
lead to the further decimation of jobs in the troubled financial
services industry," he said."Two hundred staff will transfer to IBM
but the supplier will almost immediately make 150 of these
long-serving staff redundant and will instead outsource the
provision to India."
IBM said it "does not comment on rumour and speculation." The
company began a programme of lay-offs today in the US,
IBM employees report.
A spokesman at Friends Provident said the company is unaware of
IBM's plans for IT workers that will be transferred to IBM under
TUPE.
TUPE is industrial relations legislation which protects workers
rights when they are transferred to another employer as part of a
deal.
"The deal from our point of view involves outsourcing the IT
functions that will lead to cost savings. As part of the deal 200
IT staff were transferred under TUPE," he said. The finance firm
expects to save £6m a year initially, with more savings to come as
the outsourcing contract matures.
"Clearly part of the deal is the transfer of expertise, because
these people have been working on the functionality for some time
and have knowledge which is very useful," he said.
The fact that the jobs are transferring through TUPE legislation
does not guarantee job security if there is an economic, technical
or organisational (ETO) reason for making them redundant. Mark
Lewis, partner and head of outsourcing at law firm Berwin Leighton
Paisner, said it is possible for staff transferred under TUPE
regulations to be made redundant. "This is regularly seen in the
context of TUPE," he said.
He said TUPE still applies but "the economic and organisational
practicalities give grounds to make people redundant."