Mobile phone company Telefónica O2 has announced plans to franchise 82 of its retail stores, putting more than 500 jobs in an uncertain position as the UK goes into the busiest shopping period of the year.
The Communication Workers Union has reacted with shock and anger, saying the move is a huge gamble in the fiercely competitive mobile market. CWU understands cost cutting and risk transfer is behind the decision and fears for job security of the 500-plus people employed in these 82 shops. The union is also concerned that franchising may be applied to more of O2’s 450 retail outlets.
Andy Kerr, CWU deputy general secretary, said: “Telefónica is playing poker with our members’ livelihoods in this franchising move which will destabilise the whole retail network of 450 shops, not just the 82 affected by today’s announcements. Staff will be wondering whether they have a job and what their future holds as they enter the busy pre-Christmas shopping period.
“O2 shop workers are the lowest paid staff in the company and are the most vulnerable. Not only will staff feel shocked by this decision but we believe O2 is taking a huge risk by moving into this model at this time. The company is simply hoping that appropriate candidates will come forward as franchisees in response to their advert instead of directly managing their brand and high street sales.
“We believe that TUPE will apply so staff will retain their basic terms and conditions such as pay, but there is uncertainty regarding the new pension arrangements which have been months in the making. This is just one of many worrying two-tier elements which threatens to undermine these workers’ conditions whilst nominally working for O2.”
The 82 shops are spread across the UK and vary in size, employing between 1 and 11 people each. Of the staff, 412 are in non-managerial positions currently earning a salary of around £13,500. Many of these are women working part-time. CWU understands that the company wishes to have franchised the stores out by April 2013 and is placing an advert in a magazine this week seeking possible franchisees.