City & Guilds faces union action over alleged dishonesty in staff cuts

City & Guilds is facing potential legal and industrial action over claims it has been “dishonest” over plans to shed about 400 UK staff.

Officials at the Unite union allege the owner of the training and qualifications body has been “unlawfully withholding key information during transfer consultations”, while also “advertising for new recruits when it is legally required to give staff at risk of redundancy first refusal”.

The row represents yet another crisis at the embattled former vocational charity, whose business was acquired by the private company PeopleCert last autumn in a controversial deal that went on to trigger a statutory inquiry by the Charity Commission in January, as well as PeopleCert commissioning its own internal investigation.

The investigations are understood to be considering Guardian revelations concerning a pair of City & Guilds executives receiving million-pound bonuses and sizeable salary increases after the sale.

Unite regional officer Peter Storey said: “PeopleCert has been dishonest [about its staffing plans] from the moment it took over City & Guilds. Without significant movement from the company, this dispute will continue to escalate, including through potential legal and industrial action.”

The union predicted that the round of about 75 redundancies will only be the first wave of job losses and that PeopleCert is ultimately planning to shed about one-third of its 1,300-strong UK workforce.

PeopleCert said in January that there were “no plans for compulsory redundancies in the UK”.

The City & Guilds business, which was founded in 1878 by the City of London and a group of 16 livery companies to develop a national system of technical education, charges fees for its accreditations to private training businesses and has about 60% of its income “underpinned by stable government funding schemes”.

Having maintained a fairly modest profile for much of its 148-year history, last year’s sale of the business to PeopleCert put City & Guilds in the spotlight.

In December, the Guardian revealed how a presentation prepared for PeopleCert investors set out plans for the now-private City & Guilds to shrink its UK workforce as part of a £22m cost-cutting drive. PeopleCert informed its backers of £13m of “personnel cost synergies” that would largely be achieved by replacing departing UK staff with cheaper overseas hires.

In a letter sent by Unite to PeopleCert last month, which has been seen by the Guardian, the union added: “The alignment between those previously reported measures [in the investor presentation] and the current proposals gives rise to a legitimate concern that key aspects of the outcome were decided in advance.”

PeopleCert said that, since preparing the investor presentation setting out how UK job losses could be achieved via “attrition”, a subsequent review identified the possibility of 75 compulsory job cuts.

The company said in a statement: “The proposals currently under consultation are the result of a subsequent review of the organisation’s structure, operating model and future requirements, which took place earlier this year and is separate to previous discussions on the workforce.

“No outcomes have been predetermined. The purpose of consultation is to seek feedback on the proposals, explore ways to avoid, reduce and mitigate proposed redundancies where possible, and consider alternative approaches. That process remains ongoing.”