Outsourcing strike warning

As outsourcing becomes more popular the threat of industrial action by BT's IT staff suggests the issue will become as...

As outsourcing becomes more popular the threat of industrial action by BT's IT staff suggests the issue will become as contentious as company takeovers and private finance initiatives. Nick Huber reports

Last week's threat of strike action by BT staff over a major outsourcing deal with Computacenter could be the first of many, union leaders have warned.

A majority of the 377 BT workers set to transfer to Computacenter in the proposed £350m five-year deal for desktop services voted to strike. The Communication Workers Union, which represents staff in the telecoms and banking industry, said job security and pension rights were the key issues.

BT insisted that it has consulted its staff closely about the deal, particularly over Transfer of Undertakings/ Protection of Employment regulations which protect the pay and conditions of staff when a company is sold.

This week, however, following intensive negotiations between BT managers and union leaders, a compromise deal is being considered.

But whether or not BT workers strike over the deal outsourcing is set to become as contentious as private finance initiative deals or company takeovers.

The spectre of strike action comes as the outsourcing sector continues to grow robustly, despite the economic downturn and squeeze on company IT spending.

Analysts said the landmark dispute could encourage strike action over other outsourcing deals, if companies are complacent.

"It [the Computacenter/BT deal] shows that outsourcing is not always a done deal," said Ariel Bauer, director of technology research at Merrill Lynch.

"It would not be impossible to see future examples of IT staff going on strike over outsourcing deals," Bauer, said.

He added that the onus was on the outsourcing supplier to convince IT staff that a deal was in their best interests.

Fears over job security and a different work culture are common concerns for IT staff affected by outsourcing deals.

As Computer Weekly went to press the threat of strike action at BT appeared to have been averted.

A spokesman for Communication Workers Union said that BT had offered IT staff involved in the deal a revised employment package, including greater job security and mirrored pension rights.

BT will also defer the transfer of staff to Computacenter until later this month. Computacenter was unavailable for comment.

The Communication Workers Union will recommend that its members accept the new employment package, pending a consultation with members.

However, IT directors should not dismiss the BT/Computacenter dispute as a one-off.

As Ian Cuthbert, assistant secretary for the union, warned, "I believe future [outsourcing] deals could be faced with strike action. Outsourcing is becoming the growth industry for transferring people around."

How to avoid an outsourcing dispute
  • Accept that an outsourcing deal can be just as contentious as a company merger

  • Keep employees and union leaders informed about the proposed agreement from the start of negotiations - if staff are kept in the dark rumours damaging to the deal could flourish

  • Be prepared to delay the outsourcing deal if widespread staff concerns are not allayed.

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