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How did the Heathrow dispute start?

The high drama at Heathrow began after in-flight catering company Gate Gourmet sacked 670 of its catering workers alleged to have taken part in an illegal strike. The workers walked out after Gate Gourmet hired 120 temporary staff as cover, despite being in the middle of negotiating a restructuring plan that was likely to see hundreds of full-time staff fired.The company then ordered staff to return to work on pain of losing their jobs. According to the Transport and General Workers Union, which the sacked workers belonged to, they were given three minutes to start working; according to Gate Gourmet, two hours. Either way the ultimatum resulted in the dismissal of 250 staff in the morning of the day of the strike and 350 more that afternoon.

In response to the sackings, about 1,000 BA ground services staff, also TGWU members, began a 24-hour unofficial strike. Some of the striking BA staff, chiefly baggage handlers and bus drivers, knew the sacked workers, many of whom had worked for BA before the company out-sourced its in-flight meals operation to Gate Gourmet. TGWU condemned the strike, but it was too late for BA. The resulting standstill at Heathrow paralysed the company, causing the cancellation of around 700 flights, leaving 110,000 passengers stranded at aiports around the world, all at an estimated cost of over £30 million to the airline.

How is BA involved?

BA is a separate company from Gate Gourmet, and as such cannot be held responsible for the industrial dispute. At the heart of dispute is the treatment of employees directly by Gate Gourmet, not BA.

Most local staff want to see BA succeed as the local community has a vested interest in the company, serving the airline for decades. However, it is involved in the disagreement in as much as Gate Gourmet is its sole catering provider at Heathrow. At present, several weeks after the wildcat strikes, BA has only just resumed providing hot meals in-flight.

The pay and working condition issues which helped to spark the strike and mass sackings are also in part a result of BA squeezing costs in in-flight catering. However, BA is not unique in this regard, as many airlines have been fighting to cut costs.

What is BA’s record on industrial relations?

The industrial disputes hit BA at the worst possible moment – the summer holiday season. At this time of the year resources are already overstretched dealing with the busiest part of the summer, and congestion at Heathrow, the world’s busiest international airport, leaves little capacity for dealing with unexpected events. This year’s problems have led to a rerun of chaos suffered by the airline in the summers of 2003 and 2004. In July 2003 a strike by Heathrow sales and check-in staff cost the airline about £40m.

Will the picketing by sacked Gate Gourmet workers continue?

Gate Gourmet went to the High Court to try to prevent picketing by sacked workers, saying they were intimidating other members of staff. The judge refused to ban the picketing, although he did demand that all alleged intimidation be halted and that no more than six pickets could continue at any one time. He also ruled that the TGWU would be legally responsible for the behaviour on the picket lines. However, at a recent TGWU rally, both the Tony Woodley, the general secretary, and local MPs denied any unacceptable behaviour by picketers.

What about the financial problems at Gate Gourmet?

Gate Gourmet is the second largest airline caterer in the UK and is owned by US private equity group Texas Pacific. The company is facing losses of up to £25m this year has already lost the contract to supply Virgin Atlantic, a major customer at Heathrow, because of its uncompetitive prices. It has debts of about SFr670m (£293m) and has been in default on some of its payments since the beginning of the year.

Pressure from airlines to cut costs, the rise of low-budget airlines and uneconomic working practices have left the company fighting to survive. Gate Gourmet has warned that it faces administration if a contract cannot be agreed with BA. If they were to go into administration it would put 1,400 Heathrow workers jobs at risk. However, Gate Gourmet has so far rejected proposals by BA and by union leaders despite its predicament.

What is so important about Gate Gourmet going into administration?

TGWU general secretary, Mr Woodley, has expressed his concern with Gate Gourmet’s warning it may be forced into administration. The law concerning administration of companies, revised by the 2002 Enterprise Act, enables a company to be bought while in administration, with the buyer receiving the assets but none of the debts. Directors of a company controlled by administrators can buy back their company with a clean bill of health, disregarding any debts previously incurred.

Gate Gourmet has said that the company has been in talks with risk consulting group Kroll, which could act as administrator, if the UK business went into administration. In such a case, there would be no impact on Gate Gourmet’s US operations.

Is the government taking action?

The dispute is not directly an issue for the government to resolve, however, ministers are lending support to the community with local MPs attending a recent rally.

Copyright The Financial Times Limited 2017. All rights reserved.
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