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Tesco House, Cardiff: Job Losses

Volume 627: debated on Wednesday 19 July 2017

Motion made, and Question proposed, That this House do now adjourn.—(Stuart Andrew.)

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.

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.

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.

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.

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.

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, Julie Morgan. 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.

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, Ken Skates, 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.

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 Ken Skates; 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?

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.

House adjourned.