The dispute is over Capita's decision to change its pension scheme - a move which could see staff lose 70% of their retirement income.
Staff who work on contracts in the city for financial services groups Phoenix, Royal London and Friends Life as well as IT projects have been affected, and the industrial action will commence October 5.
City AM reports that trade union, Unite, said that 95% of staff on a turnout of 72% voted in favour of industrial action, over Capita’s decision to transfer their current defined benefit scheme to a defined contribution scheme.
Unite Officer Dominic Hook, said: “The disgraceful plans by Capita to slash the deferred pay that staff will get in retirement is utterly unacceptable. Capita’s pension proposals will have far reaching consequences for the retirement of many Unite members. Some staff will lose a shocking 70% of their retirement income.”
However, allaying woes, a Capita spokesperson added: “We are in the minority of companies still offering a defined benefit pension plan to a small number, some four per cent of our workforce, of our 73,000 employees. Their accrued benefits in the existing defined benefit pension are protected and the new defined contribution offer is above the average terms offered by both our competitors and FTSE 100 companies in the UK. We are disappointed that these employees, some 550, are to support Unite’s strike action. We have plans in place to ensure that any potential disruption to our clients’ services is mitigated.”
The FTSE 250 company isn’t just facing trouble from staff, last week Capita revealed that its pre-tax profits fell 26% to £28million in the six months to June, while revenues were down three per cent to £2.07billion.
The firm also lost a £400million contract with the Ministry of Defence. The contract, to operate living, working and deployment facilities for the armed forces was secured in 2014, and was meant to last for 10 years. However, the firm was criticised for a shortfall in the number of recruits it delivered and the delay in delivering IT systems.
In July, Capita was forced to outsource its Asset Services businesses for £888million, raising cash to reduce debts that have been worsened by poor performances in the recruitment sector.
The company is in the process of restructuring following a series of profit warnings, that forced the departure of its Chief Executive Andy Parker. According to the Financial Times, the firm is still hunting for a boss.