Care Workers Face 40% Pay Cut, Union Claims

Former council care workers employed in old people’s homes that were privatised are facing huge cuts in pay this summer. Now the trade union Unison has strongly attacked the Labour-controlled council that hived off the homes five years ago.

In 2002 Torfaen Council essentially gave away its five remaining residential homes for the elderly – George Lansbury, Ty Gwyn, Arthur Jenkins, Plas y Garn and Cwmbran House – to Hafod Care Association Ltd. The terms of the deal were that the company would pick up all liabilities and responsibilities for refurbishment and redevelopment. H

afod Care also agreed to take on all of Torfaen Council’s residential care staff. The firm undertook to maintain existing terms and conditions for five years.

Now, however, the five years is almost up, and Hafod Care has announced plans to slash pay and reduce benefits for the 90 staff it took on, claiming that is the only way the business can be sustained.

Unison Regional Officer Peter Short said, “It is quite clear to us that Torfaen Council and Hafod Care either entered into an unsustainable contract, or the whole arrangement was predicated upon huge cuts in the pay and conditions of transferring staff. This is an outrageous example of the consequences of the privatisation of public services.”

In order to save up to £550,000 a year and “claw back” past deficits, the company is proposing to reduce pay rates to around £6 an hour for nearly all staff, a cut the union claims amounts to around 40% for many employees.

“At one stage there was a proposal to remove all staff from their final salary pension scheme, although that threat now appears to have been withdrawn. Other proposals include removing sick pay completely, cutting annual leave, removing all enhanced pay rates for unsocial hours and night work,” said Mr Short.

“Despite these cuts, the company still expects staff to continue working for it. Unison is organising the workforce to fight back against these proposals. The council is being lobbied to intervene and accept its responsibilities for this unacceptable state of affairs. A campaign has been launched and nothing has been ruled out.”

According to publicly-filed accounts, Hafod care had a cumulative deficit of more than £4.27m by 2005. The company argues this would rise without the proposed cuts.

Robert Wathen, the managing director of Hafod Care, said, “Consultation has and continues to take place both with staff and trade unions. Since taking over management of the homes in 2002 we have honoured our commitment to protect terms and conditions for a five year period.

“However, the unions were aware throughout the process of transfer that the staff’s terms and conditions would have to be reviewed after this time. We are anxious to attract and keep quality staff but we have to be realistic and, for the future, employ staff on conditions more reflective of the care sector which will enable the service to survive.”

Stewart Greenwell, Torfaen’s chief officer for Social Care and Housing, said, “When the council transferred its homes to Hafod Care Association in 2002, we consulted fully with affected staff and their trade unions.

“It was made very clear at that time that Hafod would guarantee terms and conditions of employment for a five-year period. It has been confirmed with Hafod Care Association and Unison that transferred staff will have the opportunity to stay with the local government pension scheme or a comparable pension scheme.”