The Financial Conduct Authority is facing mounting internal unrest after Unite secured the backing of some of the regulator’s 4,000 employees for industrial action if management refused to engage with the trade union.
Chief executive Nikhil Rathi has upset staff with proposed changes to pay and work practices as part of a divisive transformation plan. Management has refused to officially recognise Unite. The union is opposing the restructuring, arguing pay cuts would be unfair at a time when everyone is working hard to deal with the fallout from Brexit and the pandemic.
The union announced on Tuesday that 87 per cent of its members at the FCA who voted had backed industrial action unless management agreed to negotiations on the changes, which are part of a broader plan to make the watchdog more effective and efficient after a string of recent scandals.
The union has so far refused to disclose how many members it has at the regulator. Dominic Hook, the national organiser, told the Financial Times that a “significant” number of the FCA’s 4,000 staff, but “not thousands”, took part in the non-binding vote.
He warned that if management did not agree to meet union representatives, Unite would hold a statutory ballot on industrial action that could lead to the first strikes in the FCA’s nine-year history. Hook said any industrial action could include work-to-rule or one-day stoppages.
“A week of normal working hours would really mess up things up for the FCA,” he said, pointing out that many staff were working long hours in jobs that no one else could do. He said targeted action was also possible. “If a particular department is critical, a strike there could be better than trying to get everybody on strike,” added Hook.
In a statement, the FCA said it had already engaged with staff extensively on its proposals, which would lift the pay of its 800 lowest paid staff by an average of £3,800.
The FCA has not responded to Unite’s request for talks by mid-afternoon on Tuesday but Hook said he was “always optimistic”.
The most controversial element of the transformation is eliminating annual bonuses that were given to between 70 and 90 per cent of staff before the pandemic. Under the FCA’s proposals, only the best-performing 25 per cent of staff would receive a bonus from next year.
Rathi told the Treasury select committee in December that the FCA had to spend its money carefully and that bonuses should be used to “motivate and incentivise talent”.
In the same meeting, Rathi defended his decision not to recognise Unite because the trade union had not met the statutory test for recognition, which allows for staff in various groups to be represented by a union if there is majority support within those groups.
The FCA is due to publish the results of its consultation in March, with the changes due to come into effect from April 1.
Meanwhile, the government has tapped former Which? boss Richard Lloyd to take over as interim chair of the FCA from April, when Charles Randall steps down, a year before his term was due to end. Randall had said he was finishing early so that his successor could oversee the completion of the FCA’s transformation.
