British Airways pays the price for putting eggs in one basket

It wasn’t meant to be like this. For the third consecutive summer, holidaymakers were left stranded as British Airways (BA) workers walked out yet again – this time in support of workers on a wildcat strike at troubled in-flight caterer Gate Gourmet.

The fiasco that engulfed one of the world’s biggest airlines earlier this month threw 70,000 holidays and business trips into turmoil. But HR experts have said that important lessons can be learned from the way the situation was handled by all sides.

Taming the wildcat

Companies must ensure they know their workforce and keep employees engaged if they are to avoid falling victim to a wildcat strike, said Simon Barrow, chairman of employment brand consultancy People in Business.

That was not the case at Gate Gourmet – a firm owned by US venture capitalists Texas Pacific.

Faced with potentially crippling losses, it was desperate to cut costs, slash wage bills and reform what it claimed were outdated working practices.

But US-owned companies operating in the UK ignore the nuances of the British employment market at their peril. And the already low-paid, yet close-knit community of airport workers at Heathrow was a tinderbox waiting to ignite.

BA outsourced its catering operation to Gate Gourmet in 1997, and many BA employees knew the Gate Gourmet staff. Some were even related, so it was only natural for BA baggage handlers to support family members by joining the unofficial action.

“When you are fishing in the same labour pool – especially in a close-knit community where there is a history of employee unrest – you have to be aware of the risks and deal with things properly,” Barrow said. “It’s not just best practice – it’s common sense.”

Outsourcing dangers

Companies usually outsource peripheral aspects of their business so they can cut costs and concentrate on core activities. But by outsourcing its in-flight catering operation to one company using local employees, BA left itself vulnerable.

Martyn Hart, chairman of the National Outsourcing Association, said: “Companies should always take a business risk approach to outsourcing and must have a strategy in place to deal with any disaster.”

Putting all of its in-flight eggs in the Gate Gourmet basket was a perilous move for BA. There was no back-up plan to provide hot food should the arrangement turn sour, and passengers were left to face long-haul flights with little more than coffee for comfort.

“Outsourcing a critical aspect of a business to a single company can be very risky,” said Hart. “There’s little point in outsourcing and still taking the risk. If that’s the case, it might be an idea to bring the outsourced operation back in-house.”

Dealing with illegal strikers

It is also worth noting the different ways that the two companies dealt with their errant employees. While Gate Gourmet refused to reinstate all of its staff, BA baggage handlers were soon back at work.

Under UK law, employees have no right to complain of unfair dismissal if they are sacked for taking part in unofficial strike action (see box, right).

The catering staff were therefore left without a legal leg to stand on by embarking on a wildcat strike without union backing.

With its workers flouting the law, Gate Gourmet bosses were able to sack hundreds of employees without following normal procedures to protect themselves from a host of expensive unfair dismissal claims.

In contrast – and with the thousands of angry passengers camped on its doorstep – BA re-employed its baggage handlers as soon as possible, mindful perhaps that selectively re-engaging workers or sacking the lot would breed even more bad feeling.

Deborah Hely, partner and industrial relations expert at law firm Beachcroft Wansbroughs, said: “Using shock tactics such as selective re-engagement to get rid of troublemakers often has a big impact on those who remain.”

However, BA has taken a firm line to make clear the wildcat action was unacceptable, and has said it will not pay strikers during their time of illegal absence.

Of course, the best policy is to prevent walkouts arising in the first place. Consultation with employees and explaining decisions in a language they understand gives any company a much better chance of avoiding disputes, said Hely.

A contingency plan is also important, so company bosses know how – and indeed whether – they will be able to ride out the storm in the event that employees do embark on unofficial action.

Guy Lamb, partner and employment expert at law firm DLA Piper, agreed that better communication was the vital key to keeping workers on side before a situation escalates.

“If it gets to a wildcat strike situation, then you’ve already failed on an HR level,” he said. “Employees walking out en masse is as fundamental a failure of managing a workforce as it’s possible to get.”

Go to BA case highlights the need for early HR input

Strike action rules

In the UK, there is no ‘right’ to strike as such. A variety of rules, both civil and criminal, are potentially infringed during the course of industrial action.

  • First, a strike or industrial action will generally always be regarded as a breach of the individual worker’s contract of employment.
  • Second, those who organise strike action will inevitably commit what is known as one or more of the ‘economic torts’ – civil wrongs. The most typical is ‘inducement of breach of contract’ (which occurs when A encourages B to come out on strike).
  • However, trade unions and their officials are given immunity from being sued for most primary industrial action, provided they are acting within the so-called ‘golden formula’ (in contemplation or furtherance of a trade dispute) and provided complex balloting and other procedural conditions are complied with.
  • Although secondary and sympathy action also enjoyed immunity at one stage, this was removed by the Conservatives.
  • Unlawful action can be restrained by the use of a court injunction. But whether an employer resorts to the use of law is an industrial relations decision.
  • Unfair dismissal rights are affected if dismissal occurs during a strike or other industrial action. A tribunal cannot hear an unfair dismissal complaint if the employee was dismissed during industrial action, provided all are dismissed, and none re-engaged within three months of the dismissal.
  • Unofficial action is treated more seriously. If any employee is dismissed during unofficial action (as with the Heathrow dispute) such an employee is barred from complaining of unfair dismissal. If, on the other hand, the action has been lawfully organised and falls under the definition of ‘protected action’ as defined by the legislation (which includes a balloting requirement) dismissals are unfair if implemented within 12 weeks of the start of the action (or longer if the employer has not entered into certain conciliation procedures laid down by statute).
  • Other rules limit the protection for picketing to the employee’s own place of work and only then for the purpose of peacefully obtaining or communicating information, or peacefully persuading any person to work or abstain from working. Picketing outside this framework can lead to both civil and criminal liability (such as for nuisance or obstruction of the highway).

Source: Dr John McMullen, professor of labour law at the University of Leeds

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