The new head of Qinetiq is on a collision course with staff over plans to cut redundancy terms for thousands of its UK employees.
Leo Quinn, who took the helm in November last year, has told union representatives of the former government defence research group that it can no longer afford lucrative redundancy terms for the roughly half of its UK staff who are former defence ministry employees still entitled to public sector-type conditions.
He wants to terminate all collective agreements from September 30 and “modernise” them to take account of Qinetiq’s financial position following two recent profit warnings.
Mr Quinn is finalising a restructuring programme at the group that will lead to significant job losses, making the timing of his move on redundancy terms especially sensitive.
David Luxton, national secretary at the Prospect union, which represents about 2,000 of the company’s 6,500 UK employees, wrote in a letter to members last week: “This is a provocative and unhelpful development given that it was delivered to the trade unions at the beginning of a constructive discussion around creating a sustainable future for Qinetiq”.
Under a pay deal agreed three years ago, employees who joined before 2001 (mostly former MoD staff) are entitled to receive eight weeks’ pay per year of service, capped at 20 years’ service, in case of redundancy. Those people who joined after 2001 are on statutory terms.
Mr Quinn now wants to introduce statutory redundancy terms for all employees in the UK, as well as statutory notice periods.
Mr Luxton said: “We know we are in for a difficult time on all fronts. Mr Quinn is seen as a good communicator and he is spelling out that no change is not an option.
“There is no doubt there is a steely determination on his part.”
Since taking over as chief executive from Graham Love, Mr Quinn has hired McKinsey consultants to help review the business, which has suffered from a delay in orders from the MoD and setbacks in the US market.
He has also launched two internal programmes to reshape the business, called “Fit 4 Growth” and “My Contribution”.
Qinetiq declined to comment on the proposals. However, explaining the need to reduce costs in an e-mail to UK staff last week, Mr Quinn said: “Our future is directly linked to how we spend our available cash . . . Over the last three years we have spent £75m laying people off, three times the industry average. Money that could have been used to build our future competitiveness, by investing in our people.”