In the aftermath of Lehman's collapse, union body Unite has spoken out against IT workers getting a "raw deal" when redundancies are made to slash costs.
In a week where the global financial markets have plummeted, Unite is pushing to increase union support for IT staff in banks.
The UK’s largest trade union has called for an immediate assessment of the weaknesses and risks in the sector, and intervention to restore confidence and protect long-term stability in jobs.
IT employees in the City are fearing for their jobs, following Monday's collapse of investment bank Lehman Brothers that will lead to thousands of jobs cuts.
Most of Lehman's London employees, around 5,000 staff, are likely to be made redundant. The bank declined to reveal how many of these employees work in IT. European workers may also be left without their monthly salary on Friday, according to reports. PricewaterhouseCoopers, which was appointed as administrator to Lehman's UK and European operations, hinted that staff could miss out on their wages on Friday. Lead administrator Tony Lomas, a PwC partner, said: "There was no cash in the various companies to which we were appointed."
Meanwhile, Merrill Lynch has been bought by Bank of America for $50 billion (£28 billion), and AIG, the world’s largest insurer, was extended a $20 billion (£11 billion) lifeline by New York authorities.
Graham Goddard, Unite deputy general secretary added the global financial crisis has shattered confidence in the sector.
"The major job losses in the sector are fundamentally caused by precarious investments and transactions by bankers pursuing large rewards. Unite wants to see greater penalties for institutions that play games with the future of their staff through dangerous exposure and investments," he said.
IT workers and back office staff get the "rawest deal" from these job cuts, Rob MacGregor, national officer at Unite, told Computerworld UK. He added he sees a potential for “great growth” of union involvement in the sector, despite the "hostile" culture towards unionisation.
"Back office staff are under-represented [by unions],” he said. “We want to see proper guarantees on collective job security and stability, in a culture that is all about the individual,” he said.
p> “I’d really like to see union involvement increase in the sector,” he said. “Maybe it will be one of the outcomes of this situation. In Lehman, the 5,000 staff are going have no collective representation, only human resources managers and line managers, who are leaving themselves anyway.”
Unite has 200,000 members from the financial services industry, but 800,000 employees remain unrepresented by any union.
Unite represents workers in over 100 large financial services firms including Royal Bank of Scotland, HSBC and Northern Rock. But investment banks are under-represented, according to MacGregor, who said a culture change is needed for their involvement to be accepted.
“It can be hard to get agreements with investment banks. A number have never had dealings with unions, and others have been taken over by firms in the US, many of which are actively hostile to the idea,” said McGregor.
The main aim of unions would be to start positive dialogue with employers, negotiate on job stability and contracts. This often avoids the need for more aggressive action such as protests or formal industrial disputes, he said.
Unite has received numerous phone calls and emails from financial services staff in recent months, and has approached the employers concerned to address the situation.
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