British Gas staff could strike as Centrica job cuts and new contracts loom

Thousands of staff at Centrica overwhelmingly support strike action, after the British Gas owner announced sweeping job cuts and changes to contracts, according to a union.

In June Centrica (CNA.L) announced 5,000 job cuts and plans to “simplify and modernise” terms and conditions, saying workers had 80 different contracts. Around half the job losses are expected to hit managers.

A spokesperson said on Thursday that working practices had to be more flexible to give customers “what they want, when they want it, at a price they’re willing to pay.”

But the GMB union claimed the company had made a “fire and rehire threat,” after it told staff they could be given notice and re-hired on new terms if no deal can be agreed with unions.

The union said a ballot of members at Centrica-owned British Gas and PH Jones saw 95% back industrial action, with two-thirds of its 10,000 members voting.

But the poll was only consultative, highlighting workforce discontent. It spurred union leaders to warn it “paves the way for a formal strike ballot in the autumn.”

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Justin Bowden, national secretary of the GMB, claimed Centrica chiefs were “threatening to set fire to the terms and conditions of this loyal and dedicated workforce.”

“Today’s 19 to 1 vote demonstrates GMB members are not prepared to tolerate fire and rehire threats and are determined to have their own ‘insurance policy’ too. It’s time for the Centrica Board to wake up and smell the gas.”

When it unveiled the plans, Centrica warned its earnings had halved in recent years. Domestic energy giants have been grappling with greater competition and a government price cap in recent years, amid controversy over the rising cost of household bills in the 2010s.

It had already announced plans to slash £400m ($507m) from its spending this year in early April, as it warned on the impact of the pandemic. Bonus payouts for managers were paused, and a final 2019 dividend cancelled.

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Domestic energy usage has increased among customers working at home, but Centrica has also seen “a more significant reduction” in business demand as firms closed sites during the lockdown.

It has warned of an expected increase in bad debt too, with falling business and household incomes hitting customers’ ability to pay. Meanwhile prioritising essential work to minimise virus risks has hit revenues from non-essential services.

A Centrica spokesperson said: “We know that change can be very difficult and we are doing all we can to support our people – but we urgently need to act now to win back customers, grow our company and protect more jobs in the long run.”

She said the company was committed to reaching a negotiated settlement this year, and said unions accepted the need for change. Workers’ base pay and pensions would be protected, but said changing terms and conditions was “essential.”

Centrica shares were trading 0.9% lower on Thursday, though declines were less steep than across the FTSE 100 (^FTSE), which slid 1.3%.