One of the biggest trade unions in Britain, Unite, has condemned insurance giant Aviva PLC (LON: AV) for “betraying” British workers by outsourcing 600 jobs to India, one month after the company announced 2,000 job cuts.
Now, it has emerged that 600 back-office processing jobs will be transferred to lower-cost Pune in India rather than be eliminated.
The relocations will affect staff in the cities of Norwich, York and Sheffield.
“This is an appalling way to treat the loyal workforce who are the backbone of the company,” Unite’s national officer, Dominic Hook, said in a statement.
"Unite is calling on Aviva to reverse this decision and to keep the jobs in the UK. Aviva has a responsibility to the communities it profits from. It's bad enough exporting jobs overseas when the UK economy is strong, but when Britain's economy is suffering it's outrageous that the insurer isn't supporting employment in the UK."
On the whole, Aviva’s new chief executive, Mark Wilson, is seeking to save £400 million ($611 million) in costs by cutting about 6 percent of the total workforce. Wilson also wants to reduce severance packages by cutting the payout from a rate of four weeks for every year of service to two weeks.
Aviva, which lost £3.1 billion in 2012, already axed 2,500 jobs last year.
Britain’s financial services sector, including banks and insurers, has shed some 55,000 jobs -- or 5 percent of workers in the industry -- over the past four years, Victoria Redwood, an economist at London's Capital Economics, told the International Business Times.
Barclays PLC (NYSE: BCS), HSBC Holdings PLC (NYSE: HBC) and Lloyds Banking Group PLC (NYSE: LYG), among others, have already announced large job cuts this year, as well as the outsourcing of some positions to lower wage centers in Asia.
However, the issue of British jobs being moved to its former colonial empire, India, raises other troubling issues for British unions like Unite.
For one thing, the United Kingdom is home to millions of immigrants from South Asia and their descendants; it is likely that Britons of Indian and Pakistani descent are themselves losing their jobs at Aviva and other UK financial firms in this massive hemorrhaging of work.
With race and immigration always at the forefront of British political debate, in tandem with a still fragile economy, UK unions must walk a fine line when criticizing companies for moving jobs to India.
Typically, British trade unions like Unite overwhelmingly support the Labour Party and the rights of immigrant workers in the country, while condemning any acts of racism. Hence, they must be careful not to sound in any way discriminatory when discussing the sensitive topic of outsourcing jobs.
But Victoria Honeyman, a lecturer in British politics at University of Leeds, does not see a conflict here.
”There is a big difference between defending the rights of immigrant workers in Britain and defending the rights of companies to move jobs overseas,” she told the IBTimes.
“Unions, like all organizations, have a hierarchy of concerns, and defending minority rights is a very big concern. However, that applies to the country which the union resides in. That is not to say that they are not concerned about conditions overseas, but that concern comes very much lower down the pecking order of priorities than domestic jobs, and, therefore, there is no contradiction between defending the rights of immigrant workers and then criticizing companies, like Aviva, for outsourcing jobs.”
Racism is not an issue here, she adds, as the problem isn't one of race, culture or color, but geography.
“As far as the Unite union is concerned, it doesn't really matter where the jobs are being outsourced to; the key issue is that they are being outsourced,” she stated.
Palash has worked as a business journalist for 21 years in New York.