Employees at the Financial Conduct Authority (FCA) are voting in a ballot on whether to take industrial action over pay cuts, the Unite union said.
Unite said the ballot comes after the FCA management refused to negotiate with staff on a cost-cutting plan, which it said could turn the FCA into “a bargain basement” regulator.
The FCA's plans will result in the scrapping of bonuses, which according to Unite are widely considered part of basic pay, and will result in about 10%-12% pay cuts for the majority of the watchdog's 4,200 staff.
“Management at the FCA are attempting to implement a program of pay cuts, which has come after two years in which the staff at the FCA have worked gruelling hours to provide financial protection against COVID-19 for borrowers, investors, small businesses and people with mortgages," said Dominic Hook, Unite national officer.
He said the pay cuts would make it less likely that the FCA would be able to deliver a high standard of public service. "Experienced employees have been quitting the regulator in droves", with more expected to follow, Hook said.
“You cannot regulate the British financial system on a bargain basement basis as the CEO, Nikhil Rathi clearly wishes to do. Management must enter into immediate negotiations with Unite the union in order to avoid further damage and risk to the FCA.”
The FCA has been under fire for a number of scandals. A report in 2020 criticised the watchdog for failing to properly supervise the mini-bond provider London Capital & Finance before its collapse, which wiped out the savings of 11,600 investors.
It was also found to have failed in its regulation of the Connaught Income Fund in 2012, and has faced criticism for failing to intervene before Neil Woodford’s £3.1bn Woodford Equity Income Fund collapsed in 2019.
An FCA spokesperson told the Guardian: “Our pay and reward proposals would ensure the FCA continues to provide one of the best employment packages of any regulator or enforcement agency in the UK.
“Our proposals focus on those paid the least, with 800 colleagues below manager-level in line for salary increases of, on average, £3,800.
“We are now carefully considering the feedback received during our extensive consultation with colleagues, with the aim of announcing the outcome by March.”
Unite also said it is also challenging the FCA on its refusal to allow staff to have representation by an independent trade union.
"The significant growth in trade union membership across all departments of the organisation demonstrates that the recognition of an independent trade union at the FCA is long overdue," it said.