Tesco House, Cardiff: Job Losses Motion made, and Question
proposed, That this House do now adjourn.—(Stuart Andrew.) 7.01
pm Anna McMorrin (Cardiff North) (Lab) I am grateful
for the opportunity to raise the issue of the closure of the Tesco
customer operations centre in my constituency of Cardiff North with
the loss of up to 1,100 jobs. If you will allow me, Madam
Deputy...Request free trial
Tesco House, Cardiff: Job Losses
Motion made, and Question proposed, That this House do now
adjourn.—(Stuart Andrew.)
7.01 pm
-
(Cardiff North)
(Lab)
I am grateful for the opportunity to raise the issue of the
closure of the Tesco customer operations centre in my
constituency of Cardiff North with the loss of up to 1,100
jobs. If you will allow me, Madam Deputy Speaker, I shall
do three things: first, highlight the way in which Tesco
has acted; secondly, describe the human impact of these
actions; and finally, explore how we respond to these
things and the next steps.
On Wednesday 21 June, without any warning or consultation
with either the Welsh or the UK Governments, Tesco
announced it would be closing its customer contact centre
in Cardiff in February next year, leading to the loss of up
to 1,100 jobs, with the possible relocation of 150 of those
jobs to Dundee. The centre deals with inquiries from
consumers all over the UK, including those made via social
media. It has a highly motivated and skilled workforce who
take great pride in their work.
On the morning of 21 June, staff went to work as usual. On
arrival, some were told by visiting management to clear the
top floor and find somewhere else in the building to work.
An events management company had been brought in to install
a PA system. Staff then received an email inviting them to
a meeting on the top floor at 1 pm. To those crowded into
that room on the top floor, an official statement was read
out telling them they would all be made redundant. There
was no opportunity for questions. This shock announcement
has inevitably had a huge impact on the dedicated staff,
some of whom have worked there for over 20 years. In some
cases, two or three members of the same family work there.
-
(Caerphilly) (Lab)
Does my hon. Friend share my disgust at the fact that many
of the employees, including constituents of mine in
Caerphilly, only learned about the closure on social media?
-
Yes. Some staff members who were not there that day only
actually found out that they had lost their jobs through
social media. There also seems to have been no formal means
of contacting them or managing their concerns.
Following the announcement, I met Tesco executives to press
them on their reasons for the job losses and why jobs in
Dundee have seemingly been prioritised over jobs in
Cardiff. We were told that there is more space in Dundee
and that the company had already taken the decision to have
one site where customer relations staff would be based.
They were unable to provide any reason why they had not
entered into discussions with either the UK Government or
the Welsh Government.
-
(Cardiff South and
Penarth) (Lab/Co-op)
I congratulate my hon. Friend on securing this debate. I,
too, have constituents who have been affected by this
absolutely absurd decision. Does she agree that it is
completely bizarre for Tesco to not provide those reasons,
particularly when Cardiff has gained a reputation as an
excellent place for customer care centres? Many different
companies choose Cardiff because of the excellent skilled
workforce there.
-
I absolutely agree with my hon. Friend. I think that these
job losses are the latest in a string of cuts implemented
as part of the so-called turnaround plan by Dave Lewis, the
group chief executive, who joined Tesco in autumn 2015.
-
(Newport East)
(Lab)
As my hon. Friend knows, job losses on this scale will be
felt keenly not just in Cardiff but across south Wales. A
constituent of mine who works for Tesco contacted me,
saying:
“I believe that what they (Tesco) have told the press is
incorrect as I know they are outsourcing parts of their
business to a site in Bury.”
Does my hon. Friend agree that the company should be
questioned on that, too?
-
I absolutely agree with my hon. Friend that it should be
questioned on that, and I will address the issue later in
my speech.
In his first year in charge as the group chief executive,
Mr Lewis axed nearly 5,000 head office staff and UK store
management jobs, as well as more than 4,000 roles overseas
and at the group’s banking division. More than 2,500 jobs
were lost with the closure of 48 so-called underperforming
Tesco stores, and 3,000 jobs were put at risk in April when
the chain cut night shifts for shelf stackers in some of
its biggest supermarkets.
-
(Cardiff Central)
(Lab)
I am grateful to my hon. Friend and parliamentary neighbour
for securing this debate. According to last year’s Tesco
accounts, the chief executive, Dave Lewis, was given a
£4.15 million pay package, of which £2.4 million was a
bonus. Does my hon. Friend agree that he could have taken a
little bit less and the company could have kept a few more
of those jobs? Every little helps.
-
I think it is absolutely the case that the company is
prioritising management over the hard-working workforce,
who are highly skilled and motivated.
I suspect that nearly every Member of this House has a
Tesco store in their constituency. It is one of the UK’s
biggest and most recognisable brands, with a loyal customer
base.
-
(Strangford) (DUP)
I commend the hon. Lady for bringing this debate to the
House. Does she agree that there is something obscene about
the loss of 1,100 jobs at the customer contact centre at
Tesco House in Cardiff? On behalf of Tesco employees in my
constituency, I register my support for her campaign. Does
she agree that we should ask the chief executive officer of
Tesco to reconsider his decision immediately?
-
I thank the hon. Gentleman for his support.
In his desire to achieve more savings, Mr Lewis needs to
understand that he has an absolute responsibility to treat
his employees fairly and with respect. He owes them a duty
of care and he should listen to what his staff are saying.
In the days following the announcement, I went to the
customer centre to meet the staff affected, along with my
hon. Friend the Member for Cardiff Central (Jo Stevens) and
my local Assembly Member, . The staff are utterly
devastated and feel let down by a company to which some
have dedicated their working lives. One staff member told
me:
“We had felt like we were part of one big family and took
pride in coming to work. This feels like being dumped like
an old pair of shoes after being promised a secure future.
Now we are feeling exploited and used.”
Some of the worst affected households are those with
multiple members losing their jobs. Some families will lose
two, three or even four wages from their budgets. One
couple in their late 20s who had their first child less
than a year ago are both set to lose their jobs.
-
(High Peak) (Lab)
Following the coalition Government’s halving of the
statutory consultation period from 90 days to just 45 days,
the employees whose whole lives will be devastated by these
redundancies have just 45 days to find another job in a
small area where there will be more than 1,000
redundancies. Does my hon. Friend agree that 45 days is far
too short a period for employees to find alternative jobs
and for companies to look at straightforward alternative
business proposals to fulfil their duty to consult properly
with staff and look at real alternatives to keep those jobs
in place?
-
I absolutely agree with my hon. Friend about that, which is
precisely why I brought this debate to the House.
One worker told me:
“We are absolutely devastated as my fiancée is currently on
maternity leave with the birth of our baby daughter. We
have also planned to get married next year so this news has
come at the worst possible time for us in our lives and we
are very worried for the future.”
Another staff member contacted me on Facebook. He said:
“It’s been stressful for a lot of us, some more than
others. I’ve been made aware that there are options to
apply for a store role or to move to the Tesco site up
Dundee. This is not an option as it’d be too much of a
drastic life change and there are very few roles
considering the number of employees in our centre. The
announcement has also left me wondering, if I moved to
another role in the business, would I be any less
vulnerable to another redundancy announcement in future.”
He went on:
“A lot of my colleagues whose time at Tesco exceed 10 years
are choosing to stay until the end for their redundancy
package as they’ll get a significantly larger amount but
for many employees like myself who have been with Tesco
just a little over a year, we see no incentive in staying
as I don’t feel valued as an employee anymore and barely
feel like I’m part of the place now.
The morale has dropped rapidly on my work floor whereas it
felt like a small community only a year back, and now it
feels very empty and makes me feel quite down whenever I’m
in the environment. I used to love coming to work but now
the hours feel longer and it just feels like it’s getting
in the way of the hours I could be using to find
progression in life.”
Those are just a few of the many messages I have had from
distraught members of staff who have been affected.
What is going to happen now? The Welsh Government’s Cabinet
Secretary for Economy and Infrastructure, , has announced the
formation of a taskforce to find new employment
opportunities for the staff. That is a welcome development.
It will pool the knowledge and resources of key partners to
ensure that the 1,100 people currently working at the
centre are provided with the very best support in seeking
further employment, as well as welfare and emotional
support. Following my question to the Leader of the House
on 22 June, I ask the Minister before us to urge the
Department for Work and Pensions to work with the Welsh
Government and dispatch its emergency taskforce to help
ensure that the staff who are affected are fully supported.
While that work goes on, along with the Union of Shop,
Distributive and Allied Workers, I will be making the case
for Tesco to rethink its plans and for better engagement
with its workforce. If there is to be any outsourcing of
jobs, at the very least I would like an assurance from
Tesco and the management that they will go to companies
based in south Wales.
-
My hon. Friend is being very generous with her time. When
she and I met staff at Tesco, the point about outsourcing
was raised. We heard that work had been outsourced for the
past 12 months and that when people left Tesco House, they
were not being replaced. Does she share my concern about
the lack of transparency from Tesco management about where
the work is going, because the number of jobs being lost
and the jobs being offered in Dundee simply do not add up?
-
I agree with my hon. Friend: there has been no transparency
on this issue, and that is what I would like to see. I call
on the Minister to request it.
I reiterate my deep disappointment at the way Tesco has
handled the situation. I struggle to understand its
rationale for losing such a highly dedicated workforce. As
a company that supposedly values its workers, it should not
want to lose decades of experience and the specialist
skills staff have acquired. We all know Tesco, we have all
shopped there. It has a loyal customer base in Cardiff and
its staff deserve more and better than this. I hope that
the Minister will join me in condemning this behaviour and
work with me and alongside the Welsh Government in making
the case to Tesco to rethink its plans and offer better
engagement and more transparency to the workforce.
7.15 pm
-
The Parliamentary Under-Secretary of State for Business,
Energy and Industrial Strategy (Margot James)
I welcome the hon. Member for Cardiff North (Anna McMorrin)
to her place and congratulate her on initiating this
important debate.
These are worrying times for Tesco staff at the Cardiff
customer engagement centre and their families—especially
those families with more than one person employed there—and I
am sure that all our thoughts are with them. As the hon. Lady
said, at 1 o’clock on 21 June, before it was officially
announced at 2 o’clock, Tesco notified its staff of its
intended plans to simplify its customer services operation by
expanding its office in Dundee and—sadly—closing the centre
in Cardiff by February 2018. I know that the hon. Lady
tweeted, shortly after Tesco told its staff, about how
shocked she was to learn of the proposed closure, and raised
the issue with my right hon. Friend the Leader of the House
during business questions.
A 45-day consultation with the unions has begun. The
Government’s focus is to support all those affected and to
get people back into work as quickly as possible through
Jobcentre Plus. I can assure the hon. Lady that we are
working with the Department for Work and Pensions to ensure
that the maximum service is available.
-
I wish to make the same point to the Minister that I made to
my hon. Friend. The period of statutory consultation, even
for such enormous job losses, has been halved from 90 days to
45 days. Whatever support the DWP and Jobcentre Plus can put
in is very welcome, but 45 days is far too short a period for
so many jobs to be found in a city such as Cardiff. Although
Cardiff has good employment levels, 1,200 good jobs cannot be
replaced in such a short time. Will the Minister look at
reviewing that halving to assist companies in supporting
their employees?
-
I thank the hon. Lady for her intervention and I did note her
earlier remarks. I do not think there is any prospect of
reversing that decision. I accept that it can prove difficult
for people to find alternative employment within the 45 days,
but a lot of support is going on in Cardiff, not just from
the DWP and the Government but from the Welsh Assembly. It is
a buoyant economy and I hope that people will find
satisfactory employment within that timeframe.
It is not always easy to find another job, and even if people
do so it does not alter the hurt they feel at the rejection
that redundancy always involves. But business change is an
inevitable consequence of competitive markets, and retail is
a highly competitive market at the moment. Commercial and
economic opportunities and threats mean that companies will
need to reorganise, merge, expand and, sometimes,
unfortunately contract in response. To ensure businesses
remain viable and profitable, they need the flexibility to
respond to the circumstances they are facing as best they
can. At the same time, employees will want to know how the
changes are likely to affect them, and what their options are
for the future. It is vital, therefore, that there is
effective consultation with employees about the potential for
collective redundancies.
-
Is the Minister aware that this is the largest single number
of job losses that has been announced in Wales for a decade?
About 100 of my constituents are affected by the decision,
and they will be very disappointed that the Minister batted
away the point made by my hon. Friend the Member for High
Peak (Ruth George) about the consultation period. Will she
please reconsider, and talk to her Cabinet colleagues about
the issue?
-
Let me reassure the hon. Lady. The fact that this is the
worst case for 10 years points to the buoyancy of the economy
in Wales. That part of the country is doing well. When I
visited it just two months ago, I was very impressed by the
dynamism that I found in Cardiff and the surrounding area. I
do not share the hon. Lady’s pessimism about the
opportunities for people. However, as I said earlier, I
certainly appreciate that it is not a simple case of getting
another job and all is well, particularly when a whole
community is affected as this community has been.
Let me say something about the legislation. Collective
redundancy legislation strikes a balance between the needs of
the business and the needs of employees. It applies when 20
or more employees are made redundant at one establishment
within 90 days. In those circumstances, employers have a
statutory duty to consult employees’ representatives about
the proposed redundancies. The consultation must be with the
employees’ trade union representatives, or with other elected
employee representatives when there is no recognised trade
union. It must be completed before any dismissal notices can
take effect, and it must be undertaken with a view to
reaching agreement, although sometimes—I recognise
this—agreement may not be possible. It must include
consideration of ways of avoiding redundancies in the first
place, reducing the number of people to be made redundant,
and importantly, mitigating the effect of the dismissals.
Employers also have a number of obligations, including a
requirement to notify the Secretary of State for Business,
Energy and Industrial Strategy of the proposed collective
redundancies before the start of the statutory consultation.
Redundancy can be—and usually is—a stressful time for those
affected. I want to highlight the service offered by the ACAS
helpline, which can advise people on their particular
circumstances. ACAS has also produced a guide for employers
on handling large-scale redundancies such as those that we
are discussing this evening.
Let me now say something about the support that is available
to employees who are made redundant. Throughout the
redundancy process, employers still have obligations to their
employees, and should be thinking about the help that they
can offer at all times. Employees with at least two years’
service who have been given notice of redundancy have a right
to reasonable time off so that they can look for a new job or
arrange training. The Department for Work and Pensions and
the local Jobcentre Plus have already been in touch with
Tesco to offer their support.
I recommend that, in the case of redundancies, employers
should always contact Jobcentre Plus as soon as possible to
discuss appropriate support that can be delivered locally.
All decisions about appropriate support are made locally,
because a decision based on a specific redundancy situation,
an individual’s own transferable skills and experience, and
the availability of jobs in the local area is far more likely
to be the right decision.
-
Does the Minister agree that these are not normal redundancy
circumstances? Does she agree that the DWP should dispatch
the emergency taskforce to help those affected to seek new
employment, and work with the Welsh Government as well?
-
I very much agree with what is behind the hon. Lady’s
intervention. My right hon. Friend the Secretary of State for
Wales is taking that forward, and has already met the chief
executive. The south-east Wales district Jobcentre Plus will
deploy its redundancy response action plan, which includes
working with partner organisations such as Careers Wales, the
Welsh Government, the National Employer Partnership Team, the
local authority, DWP pensions and Tesco trade unions to
deliver a bespoke package of support, which I think is what
the hon. Lady is after. The typical support provided for
individuals is matching people to local known job vacancies
and/or helping to construct or improve CVs. Where there is
scope to do so, support can be delivered on a group basis,
for example by bringing redundant workers and employers
together at a jobs fair as well as at group sessions and
one-to-ones on site, to provide support and information on
benefits, pensions, support from DWP and Careers Wales.
Matching current vacancies to the skills and requirements of
the affected individuals is a key part of the service
Jobcentre Plus provides. This has been successful in many
other redundancy situations.
Tesco has assured Government that its first priority is to do
everything it can to support its colleagues in Cardiff,
including helping them to find roles within Tesco, working
with Jobcentre Plus, USDAW and the Welsh Government, and
connecting with other local employers who might have
vacancies.
-
One way in which Tesco could assist these staff members is
not to make them redundant six weeks before they qualify for
their annual bonus payment. Does the Minister agree that such
behaviour should be discouraged?
-
I am very sympathetic to that point; that seems to add insult
to injury. My right hon. Friend the Secretary of State for
Wales has raised that issue with the chief executive of
Tesco, and I am sure he will raise it again thanks to the
hon. Lady’s intervention.
The Welsh Government have already established a taskforce,
which stands ready to support the Cardiff workers once the
outcome of the consultation is known. It is being led by
; Fiona Jones, DWP’s director
for Wales work services, is a member of the taskforce, too.
Tesco has confirmed that it will also work closely with the
Welsh Government on its redundancy action scheme—ReAct—a
programme that funds training for people living in Wales who
are facing redundancy. Tesco will be engaging with the Welsh
Contact Centre Forum and will be keen to reach out to other
employers who might have vacancies. A significant number of
businesses have already approached both Tesco and the Welsh
Government, but the current focus has to be on the ongoing
consultation process before any detailed discussions can
progress with other companies. At present, Tesco is not able
to provide specific details on the package available to
staff, as this will be considered as part of the ongoing
45-day consultation.
In conclusion, I reiterate that retail is a vital sector for
the UK economy and we are committed to it.
-
Will the Minister join the Leader of the House in condemning
the way in which Tesco made this announcement? When I asked
the Leader of the House about this shortly after the
announcement, she was appalled at the way things had been
done.
-
I do not think I would go as far as to condemn that, because
I believe Tesco made every effort to inform people on a
one-to-one basis. Some people were away. [Interruption.] If I
am wrong about that, I apologise, but the information I have
had is that Tesco did make every effort. Some people were
away; it did contact them. It is appalling that some people
found out about this on social media—and the situation in the
Chamber lighting-wise has slightly thrown me off.
I know that the fact that retail is highly competitive and
buoyant will be of little comfort to Tesco workers at the
Cardiff customer engagement centre who are facing an
uncertain future. Every collective redundancy situation
involves individuals, and their needs need to be managed
carefully. It is vital that individual workers receive the
information and support that they need, as and when they need
it. This Government and the Assembly in Wales stand ready to
provide every possible support to the hon. Lady’s
constituents and those of other Members representing the
Cardiff area. I wish them all the very best in their search
for new employment if the redundancies go ahead.
-
On a point of order, Madam Deputy Speaker. I apologise for
the unusual nature of this point of order, just before the
question is put. Have you or Mr Speaker had notice of any
statements, written or otherwise, to be made tomorrow by the
Secretary of State for Transport relating to crucial
decisions in Wales on St Mellons parkway station in my
constituency and to the worrying rumours about rail
electrification in south Wales?
-
Madam Deputy Speaker (Dame Rosie Winterton)
I am not aware of any notification of statements, but I am
sure the hon. Gentleman knows that if he has not heard
anything by tomorrow there will be an opportunity to raise
the issue, perhaps during business questions.
Question put and agreed to.
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