Harrods is preparing to use agency workers to replace staff who could go on strike – which would make them the first major firm to take advantage of controversial new laws.
According to the Unite union, the iconic luxury outlet sent a letter to staff ahead of an industrial action ballot, with approximately 150 staff set to vote over what the union calls a “pay cut disguised as a rise”.
United said staff had rejected an initial five per cent pay offer and talks with the conciliation service Acas were agreed. Two days before the Acas talks, and without notifying Unite’s workplace representatives or officials, Harrods reportedly wrote to security staff offering them a seven per cent pay rise to bring their below-average wages up to industry standards.
The strike ballot was announced in response to this offer.
Harrods’ letter to staff working in store services, engineering, maintenance and security, reportedly stated: “Recent legislative changes relating to the Conduct of Employment Agencies and Employment Business Regulations now allows agencies to provide temporary workers to perform duties normally performed by a worker who is on strike. We are therefore no longer restricted from engaging temporary workers should any industrial action take place now or in the future.”
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Last month (July 2022), MPs approved controversial changes to the law to allow agency workers to fill in for staff on strike, partly in response to the growing number of sectors, such as rail workers, staging strikes over pay disputes and working conditions.
Prior to the proposal being approved in Parliament, the Government’s press release announcing the plans explained the benefits of removing what they describe as “burdensome legal restrictions”, while noting that health and safety rules may still limit how agency workers can be used to cover striking workers.
It said the changes “will give businesses impacted by strike action the freedom to tap into the services of employment businesses who can provide skilled, temporary agency staff at short notice to temporarily cover essential roles for the duration of the strike.”
Speaking of Harrods’ reported plans, Unite general secretary Sharon Graham said: “It comes as no surprise that Harrods - known for catering to the supremely well-off - could be the first employer Unite has come across to threaten low paid staff with the recent government legislation designed to break strikes.
“Harrod’s attempts to use this new legislation to bully our members doesn’t change a thing. Unite is prepared for all eventualities and our members at Harrods will receive the full backing of the union in their fight for a fair pay rise.”
Unite regional officer Balvinder Bir said: “At every turn, Harrods has tried its best to union bust. From threatening members with the new agency worker laws, to trying to negotiate around the union and Acas by sending individual workers letters. All in order to force through a pay cut disguised as a rise.
“I’m sure the high-end brands that sell through Harrods, such as Gucci, Dolce & Gabbana, Prada, Louis Vuitton, Versace and Stella McCartney, will be embarrassed by Harrods' tactics. Harrods needs to return with a pay offer our members can accept before this dispute escalates.”
‘Not our preferred course of action’
A Harrods spokesperson told MailOnline: “As a business, we undertake rigorous and regular benchmarking to ensure all colleagues are paid competitively. Our base pay rates are very competitive within the industry, and the pay rise we have offered will ensure this remains the case.
“Unfortunately, we are unable to award these payments to all impacted colleagues until pay negotiations have concluded with Unite.
“This is why it is extremely disappointing that Unite continues to delay this pay increase being awarded and backdated for the colleagues in this group. This is our number one priority.
“We continue to urge Unite to work with us to ensure this is swiftly resolved for the benefit of all our hard-working and dedicated colleagues.”
The spokesperson went on: “While we are able to engage temporary workers if industrial action occurs, this is certainly not our preferred course of action.
“That is why we are urging Unite to work with us to resolve this matter as swiftly as possible.”
Could Harrods’ decision set a precedent?
As the first major company to confirm it is seeking to take advantage of the new laws, it’s likely that other firms facing similar threats of strike action might follow in their footsteps by turning to agency workers to plug the gaps.
However, legal experts have warned that any short-term benefits will be outweighed by the effects the rule change will have on employee relations.
Samantha Dickinson, Partner at Mayo Wynne Baxter, said: “It is the Conduct of Employment Agencies and Employment Businesses Regulations 2003 that prevents an agency from supplying a company with temporary workers to perform duties normally carried out by a striking worker, but employers can already circumvent this by employing staff directly.
“Altering the legislation will mean employers can be more agile when faced with strike action as we head into a summer of discontent with further strikes looming at train companies and across other industries; presuming of course there are qualified workers that can be called upon.
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“However, this new legislation will inevitably erode the rights of workers and the power of their trade unions as well as causing tension between agency and non-agency staff - a short-term price many who rely on the transport industry in order to go about their daily business may be willing to pay.”
Jonathan Tuck, Employment Partner at Baker McKenzie, said that firms should “think carefully” about their contingency plans.
Tuck said: “...these are significant changes to trade union law and give businesses greater flexibility in managing the effect of industrial action. However, it remains to be seen how effective these will be – a number of employment businesses have announced that their workers will not be used to replace striking workers – and taking such an approach, while lawful, is likely to impact industrial and employee relations.
“Whilst the additional flexibility for businesses is welcome, they should think carefully about how they manage their contingency planning going forwards. It will also be interesting to see whether the change to the statutory cap on compensation leads to more employers choosing to sue for damages rather than apply for injunctions to stop the strikes going ahead at all."