Britain - Gate Gourmet dispute: workers' solidarity versus bureaucratic manoeuvres

Sep/Oct 2005

The sacking of 667 Gate Gourmet workers at Heathrow this August caused the first significant sympathy strike by other workers that has taken place for over a decade. Around 1,000 British Airways luggage handlers, loaders, cargo handlers and air crew drivers, suddenly and without warning, instead of arriving at work, joined Gate Gourmet colleagues outside Terminal 4, to demand their reinstatement.

BA experienced its biggest single disruption at Heathrow to date, to the utter dismay of BA boss Rod Eddington. In an open letter to staff, he wrote: "it was a body blow that defies belief. Never before have we had to cancel the entire operation at our world-wide base". BA claims this 36-hour strike will cost it £40m.

What these BA workers demonstrated was just how strong the working class can be, if it so decides. In this case, due to their key role in BA's operations, even this relatively small number of workers was able to make a huge impact by hitting BA, without warning, just when and where it hurt the most.

The fact that they were prepared to lose their pay and also risk losing their jobs by taking such action, without all the usual "legal" rigmarole, of course defies the belief of bosses like Eddington. They can only understand "actions", aimed at the "selfless" task of increasing their own incomes and those of their fellow shareholders!

It took almost a week for BA to get its flights back to normal, but of course, all of its on-flight meals are still not guaranteed, due to the so far still unresolved dispute at Gate Gourmet.

Moreover, due to the special role of the BA workers involved in this "unofficial secondary action", and despite Eddington's attempt to isolate the alleged "ringleaders" by setting up a confidential hotline for workers to grass up their fellows, BA has had no option but to forget about taking any measures against the strikers, other than not paying them for the hours during which they were striking.

And of course, this strike immediately hit the headlines. The solid old bosses' mouthpiece, the Financial Times, is not far off the mark when it calls this "one of the most high profile labour disputes seen in the UK since the 1980s".

Indeed, it comes as a reminder that, after all, the tourist and airline industries are not just a matter of glossy brochures and designer uniforms. They also depend on the labour of thousands of manual workers: that working class which so many people claim "no longer exists".

The fruits of outsourcing

The dispute at Gate Gourmet, the world's second largest specialist airline caterer, is where the whole story begins. But BA is not an innocent party in these events in any respect.

Until 1997, BA did its own catering, in-house. It then decided that by outsourcing this function, it could save a lot of money. So it sold its operation to Gate Gourmet, at that time the catering subsidiary of Swissair. BA's latest contract with Gate Gourmet aimed at a £50m reduction in costs to BA over its duration, with 3% year-on-year productivity increases which obviously meant screwing more out of the workforce for less.

In the meantime, however, Swissair suffered a protracted period of de facto bankruptcy, which led it to make 3,000 Gate Gourmet workers in its global operation redundant in 2001, and then to sell off its catering arm to Texas Pacific Group (TPG) in December 2002. TPG specialises in buying "distressed" companies, "restructuring" them and reselling them. According to the Observer, their "companies are loaded with debt and sweated mercilessly with a view to being sold on as soon as possible" - for a sizeable profit, of course. (With TPG's takeover of Continental Airlines, however, it took 10 years after restructuring before the company could be sold, but then TPG received 11 times the price it had paid for it!)

After its acquisition by TPG, Gate Gourmet was under even more pressure to produce a profit than before, despite the context of an industry squeezed by the competition of cheap, no-food airlines. In London, where it employed 2,000 workers at Heathrow, it set about restructuring around 18 months ago, with the aim of saving £14m on labour costs alone. Part of this restructuring plan involved bringing in new management, cheapening the "menu" by changing suppliers, cutting all kinds of corners on plant and workers' conditions, cutting workers' pay packets - and cutting 675 jobs as well. There was little doubt that it was intending to replace many of these workers with temps.

Gate Gourmet's tactics: a conspiracy against its workforce?

Already pay was not good by London standards, at around £6.20/hour, with drivers on £8/hour for a 6-days-on, 2-days-off rota. But Gate Gourmet was out to cut drivers' pay to £6.35 per hour. It had set up its own logistics company, Versa, 8 months before the dispute and apparently had workers in place to take over driving jobs at Gate Gourmet.

As to the rest of the plan, when chairman David Siegel explains that his company was merely trying to get rid of "outdated working practices", he does not mean that it is "outdated" to ask workers to work more than 8 hours a day! No, he means that it is outdated to expect bosses to pay a premium for this imposition on workers' lives. So one of the proposals was a flat rate for overtime. Breaks were to be cut and holidays reduced. But it was apparently not "outdated" at all, for food workers to have to use faulty equipment, like broken trolleys, amid spillages on the floor, in congested areas, among blocked drains, etc., etc.

The restructuring plan was initially put to T&G union officials representing Heathrow workers six months ago, using the additional blackmail of the theat of the company going under. Gate Gourmet claimed its British operations had been loss-making ever since it took over and that this year, these losses would reach £25m.

So the job cuts and changes in working practices were presented as a "rescue package" and as such, agreed, subject to workforce ballot, by the T&G, with the proviso that the redundancies were across the board and included management grades.

At this point, 147 workers from the shopfloor suddenly found themselves being upgraded to the category of management and threatened with redundancy, while existing managers were to be left in place. After this blatant trick, the workforce voted 9 to 1 against the package. This resulted in a stalemate which was then meant to go to arbitration at ACAS in August.

But then, having earmarked 147 jobs for the axe, management said it was bringing in 120 casual workers with the excuse that they were needed to cover the holiday period. The union reps said they would only agree to new workers being taken on if the threat of redundancies was removed.

On Wednesday 10 August, the 120 temps were brought in anyway. The union reps assembled the workers in the canteen for a meeting and went off to find the management. While they were absent, the assembled workers were told by managers that they had 3 minutes to get back to their jobs or they would be sacked. When they refused, they were marched out of the building and in effect, locked out. Their fellow workers, arriving for the late shift who then refused to go in, assembled in the car park and were told by megaphone that they were sacked too.

Private security guards were immediately put on all the gates and extra casual workers from a local temp agency (Blue Arrow) were bussed in to the plant. Apparently this was pre-arranged according to a contingency plan, which Gate Gourmet bosses admit they had made in advance. No wonder the workforce suspects that they were subject to a deliberate provocation so that Gate Gourmet could get rid of part of the workforce without the expense of paying for redundancies.

Dismissal letters were sent out to 667 workers affected by this de facto lock-out and strike by the late shift, but also to workers who happened to be off sick that day or on holiday!

This left the workers only one option - to mount a huge "picket" on the so-called Beacon Hill, outside the company offices at Terminal 4. It should be said that 70%of the workforce comprises women, mainly Asian with many, like a lot of Heathrow's workforce, coming from nearby Southall. Having long-standing links with BA workers, as many had worked in the company while it was still a BA operation, as well as the fact that they all work on the same site, they got an immediate solidarity response from BA workers arriving for work the next day. While air passengers could do without food, the key role of BA baggage handlers, drivers, cargo and loading workers meant that planes could not leave the airport. It was this unexpected solidarity action, which set the cat among the bosses' pigeons - at both BA and Gate Gourmet - and it was precisely this action which had the potential of getting the Gate Gourmet workers reinstated without further ado. But that was not to be.

Tony Woodley dons his fireman's garb

Having grounded at least 700 flights, BA workers were persuaded by T&G officials by the Friday night to start going back to work, even if some stayed out a bit longer. The T&G leadership had wasted no time repudiating the "unofficial action" of its members in BA. Its official letter was circulated to all the strikers telling them that the union "did not condone" their "illegal" action and that they should get back to work immediately. Of course, such letters are standard with any unofficial strike, to protect the union machine and its leaders from legal action and possible sequestration. As for the BA workers involved, given the circumstances, BA would have been in no position to do what Gate Gourmet had done and sack them, since it risked causing a further escalation, which would have meant even more damaging disruption to BA's peak summer time schedules.

This was born out afterwards by the fact that BA did nothing except cut strikers pay, after a half-hearted attempt to "root out the instigators" by advertising one of those hotlines for workers to phone and tell tales about their fellows.

That said, the huge and immediate impact of their sympathy strike, the arrival of T&G leader, Tony Woodley, on the scene with his assurance that their Gate Gourmet colleagues would be reinstated with the T&G back in control of the situation, all helped to persuade BA workers that their action was no longer needed.

In fact the reality turns out to be quite the reverse. But it is still not necessarily the end of the matter. Not only because these BA workers have their own grievances against BA, while not entirely trusting union leaders to defend their interests (thanks to past experience), but also because the ties they feel to their fellows at Gate Gourmet remain.

Unfortunately, however, for the time being this has left the sacked Gate Gourmet workers high and dry on Beacon Hill - and dependent on the outcome of negotiations by T&G and TUC officials.

The dirty deal

Gate Gourmet quicky got a court injunction against the hundreds of Gate Gourmet workers who were now protesting daily outside their offices, accusing them of intimidating staff. The injunction limited the number of "pickets", while naming 17 workers as guilty of harassment.

While this injunction has been challenged by the union and finally some of the names have been removed form the court's list, some names remain - and it is intimated by Gate Gourmet (whether this is a tactic or not) that these named workers are to remain sacked as "chief troublemakers", regardless of the final outcome.

After the usual exchange of "pleasantries" between T&G officials and Gate Gourmet bosses, on the 12 August talks began under ACAS supervision. This was in fact the day already earmarked for arbitration over the previously rejected June "rescue package". And although these talks broke down, by the 26th August an announcement was made that a new "redundancy agreement" had been tabled, subject to a workforce vote, which more or less gives Gate Gourmet what it wanted in June. This time the situation is different however, because 667 workers have in the meantime been dismissed.

So what exactly does the agreement say? Gate Gourmet wants its 675 redundancies. Coincidently, the number of "sacked" workers just about equals this number. It is now offering these dismissed workers a "compensation payment" which is equivalent to the redundancy package available to the 1,400 "loyal current staff", of 2 weeks pay for every year worked (yes, twice the "statutory redundancy pay" but a mere pittance). The company, "at its discretion may accept or decline these requests for redundancy" and it hopes "that the results of this voluntary programme and compensation payment plan, coupled with a possible compulsory programme and work rule changes, will reduce its workforce to levels agreed upon by the union which will restore the company to economic viability."

So, according to Gate Gourmet, T&G negotiator, Brendan Gold has agreed to 675 job cuts and also not to rule out compulsory redundancies - as well as agreeing changes in working practices, in principle.

Part of the problem, not the solution

That Gold took on board the "economic viability of the company" rubbish is not surprising. This is a tradition among all leading officials. But then it should be recalled that signing up to job cuts to "save" a company's profits can be said to have been pioneered by Tony Woodley's predecessor at the head of the T&G, Bill Morris - and in BA, too. This was back in 1996, when BA wanted to cut 5,000 jobs, eventually restoring 2,000 of them (many outsourced! and make cost savings of £1bn. Morris argued that cutting some jobs guaranteed the security of others! A 2-year pay freeze for ground staff and a 19% cut in the starting wage of cabin crews was also agreed at the time.

While it was the GMB's Kevin Curran who smothered the fire of summer 2003's 2-day "wildcat strike" of check-in staff, the same excuse of protecting BA against the £50-70m "losses" it predicted that year, was used to agree to yet another redundancy programme at Heathrow targeting 13,000 jobs, on top of agreeing most of the new ways of working opposed by the check-in staff!

But last year, when union leaders had the chance of at least turning the argument around, and saying that since BA was making good profits again, it should deliver on jobs and pay, instead, they once more agreed to everything BA wanted, cancelling a strike planned after 71% of ground staff had voted for it. This time, however, the context was the 13,000 job cuts over the last year and there were now extremely serious staff shortages! So much so, that BA had to cancel 950 flights between August and December 2004. And that August, there also was chaos for holiday passengers, precisely and only due to these shortages. But BA blamed staff shortages on workers' poor attendance! In fact during the pay negotiations many workers took unofficial action right across the board, some staying "off sick" in protest at their huge work overload. The union agreed to a derisory inflation pay rise for three years and a separate deal was made on attendance for a new, tighter procedure, but including a bonus for not getting sick!

While the T&G's own bulletins reported how the "wealth created per employee" had risen by over £7,000 since 2001, and that employee costs at BA had fallen by 11.3% in the same period, there was no question of demanding a restoration of the jobs which had been cut and decent wages and conditions. By September the T&G's Brendan Gold was "welcoming a grand total of 416 new jobs" as it would "relieve pressure on overworked terminal staff"!

Today, when BA has increased its pre-tax profits from £230m last year to £415m this year, that is, by 85%, these profit-linked union officials have finally made a few noises about BA's miserliness over its contract with Gate Gourmet.

Pointing at BA's record profits, Woodley asked them to do the right thing, by reducing their squeeze on Gate Gourmet - and now it looks like they have done exactly that, by guaranteeing Gate Gourmet's contract under slightly less austere terms, until 2010. But although they will not admit it, is seems they may have also given Gate Gourmet a subsidy towards the redundancy package now being offered in order to get rid of 675 workers! Is that what Woodley meant, when giving BA such helpful advice?

Perhaps worse than this, is the way that anti-American rhetoric, in fact xenophobia, is considered not only acceptable these days, but actually mandatory, by union officials. So Gate Gourmet was characterised by everyone involved as an anomaly, a bad, American, union bashing company! It took a middle class liberal journalist like Polly Toynbee to point out that no, Gate Gourmet is not a "freak case of a of wild West Texas management. It is British business's state of mind, it is the CBI and the chambers of commerce, it is the essence of political discourse on industry, where the only value is the short-term quick buck in share price, where 'flexibility' and outsourcing are always good, and regulation always bad. (...) Gate Gourmet screws down pay in very British style while FTSE company directors pay themselves a very British 16% rise, with a typical CEO on £2.5m."

Now Woodley aims to table a resolution at the TUC conference over legalising secondary action. In his opinion, "the Gate Gourmet scandal has highlighted a number of important areas where the law is tilted towards bad employers and against the legitimate rights of workers." Did it really need this dispute to highlight the fact that when capitalism rules, the law rules in its favour?

In the Guardian newpaper six days after the BA strike, he wrote sanctimoniously: "Solidarity among workers speaks to the best of human instincts. It is the foundation stone of the labour movement. Of course, it needs to be exercised responsibly. (...)the law has to change.(...) And above all, it should recognise the impulse to solidarity - 'secondary action' in the jargon - by bringing it within the scope of the law."

Woodley would like things to be legally under "responsible" union control. He has since elaborated further to say that such a change in the law could be made under the present conditions for legal industrial ballot - i.e., the whole charade of 2 weeks notice of a ballot, a postal ballot, awaiting the result, further negotiations, a strike notice (unlikely) and so on!

But wasn't it precisely the initial lack of control by "responsible" union officials over the action in the current dispute - both at Gate Gourmet and at BA, which caused the bosses such anxiety? As the CBI's spokesman put it, "It raises questions about the ability of the unions themselves to control their members. It may be the local organisers within the union structures who are ultimately encouraging this behaviour, but it is putting the whole union at risk". Yes, it is indeed a risk to the union bureaucracy, which does not like it either.

Having condemned the "contracting out culture" as "iniquitous", Woodley expects the government to regulate this, when Labour governments have followed the Tories in leading the way on this score!

His TUC resolutions will also ask for a law preventing the drafting in of temporary workers on lower pay, particularly where there are plans for redundancies. But isn't this normal practice, and especially in state-owned operations. as has been the case, for instance, ever since tens of thousands of jobs began to be slashed at Royal Mail and in the civil service?

Obviously, these opportunistic blasts of hot air from the union bureaucracy have one main purpose. The bureaucracy hopes that this will help it regain some legitimacy in workers' eyes. Yes, a legitimacy lost because the bureaucracy itself has hidden behind the anti-union laws all these years, promoting partnership with "good employers" and failing to defend even in the most basic way the rights of workers. That is why unofficial action which bypasses them, threatens them as much as it does the bosses. And that is why they would like workers to calm down and stay quietly in their low-paid temporary jobs or their "flexible" permanent jobs without rocking the boat, in the vain hope that the law will come to their rescue. But the class struggle never made any progress on the "right" side of the law.