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Capita Newsletter June 2009

A NEWSLETTER FOR UNITE MEMBERS IN CAPITA

PAY UPDATE
Most Capita sites in Capita Life &Pension (L&P) have now agreed pay increases and bonus amounts. However we still have two contracts where our members have rejected the offers put forward by Capita. Here is the up to date news from each contract/site.

 Belfast (Prudential) – A 1.5% pay increase paid across the board (so not based on market or performance) plus a bonus payment which is on target. 91% of members have accepted this offer.

 Bournemouth (Deutsche Bank) – A 1.5% pay increase, a ballot of the membership has taken and has been agreed by the membership.

 Glasgow & Wythall (Pearl) – Again it was a 1.5% pot but distributed partly based on performance. An on target bonus was also paid.

 Glasgow (Hartshead) – Agreement has not been reached in Glasgow Hartshead and Unite are some way from being able to reach agreement. The main issue is the fact that the offer from Capita is 1.5% with no bonus. Talks are ongoing but members have not ruled out taking action if necessary.

 Manchester (C.I.S) - After several meetings with management the proposal on pay distribution was £550 for managers (capped for those earning above £40,000), £440 for staff who had exceeded, £275 for achieved and £220 for progressing. However most worryingly there was no pay rise what so ever for any member of staff paid at 110% or above of the market rate. The market rate was also not increased. As a result of this around 31% of Staff will not get a pay increase. The offer was put to Ballot and was rejected by 89% of members. Further talks are now taking place.

 Reading (Prudential) A 1.5% pay increase across the board (so not based on market of performance) plus a bonus payment which was on target and was distributed based on performance. 89% of members accepted the deal on offer.

FINANCE SECTOR BRIEFING FOR THE UK GOVERNMENT

Unite has been lobbying the government about the mass job losses hitting the Finance Sector. This isn’t just about the big banks although clearly the banking sector is being hit hard. Unite is concerned that other Companies will jump on the bandwagon and will make redundancies in the UK even though they continue to make very good profits. This could include some of the UK Insurance Companies (we have already seen big announcements in Aviva and Legal and General) and also Capita.

For Capita - Unite produced the following report for the Government.

In 2009 Capita Life and Pensions has continued to rapidly expand into UK Financial Services. This year we have already seen two big new contract announcements with AXA and Abbey Life work being outsourced to Capita. This means around another 1500 finance sector workers will move into Capita. Capita also took over the administration on Prudential life and pension policies during 2008 with nearly 1700 UK workers moving from Prudential to Capita. The Prudential contract also gave Capita an increased presence in Mumbai with around 4000 employees in India now working for Capita. Most employees TUPE into Capita and in the main their key terms and conditions are protected. Capita L&P now has contracts with Pearl/Resolution Life, Zurich, Prudential, Coop Insurance Services, Abbey Life and shortly AXA employing around 12000 staff in the UK and around 4000 outside of the UK.

The Capita business model involves winning such contracts and reducing costs either through IT system improvements or through the offshoring of work. There has already been one site closure in Wythall resulting in around 500 job losses. Capita are currently undertaking a feasibility study to see if further work can be offshored from Reading & Stirling this could result in compulsory job losses which Unite will challenge. So far around 300 job roles are in scope for this feasibility study. In Belfast since Capita took over the contract in 2006 the headcount has reduced from around 500 to 250.

There is a view that if some the complex work is moved offshore this could be to the detriment of customers. The skills, knowledge and experience of workers dealing with the more complex life and pensions products cannot be easily replicated as it can take years to build up such knowledge. UK workers in the Life and pensions industry are just not worried about the impact on their jobs they are also genuinely concerned about the impact on customers. Unite are concerned that cutting costs and making ever increasing profits will ultimately be to the detriment of customers and service. Clearly our main aim is to try to protect jobs and members key terms and conditions.