Guarantees demanded in BBC sell-off

BECTU has tabled demands for protection of staff in BBC Broadcast Ltd, a wholly-owned BBC subsidiary threatened with privatisation.

Included in the list are guarantees that conditions of service, job security, and pensions will all be protected if the company, which is responsible for playout of BBC TV programmes, is sold this summer.

Go straight to full list of demands

The union's move comes in response to newspaper advertisements placed last week (March 4), inviting expressions of interest from prospective purchasers of the company, which has a 7-year contract with the BBC worth more than £100 million a year.

Union negotiators were given warning of the advertisements at a meeting on March 1, where they heard that although a management buyout was possible at this stage in the sale process, it was more likely that any management stake in the company's equity, if there were to be one, would emerge closer to the target sale date of August 1 2005.

Read report of March 1 negotiating meeting

One of BECTU's demands is that staff should be able to participate in any equity offering if the company's management mount a successful buyout bid, or are involved in any new ownership structure.

The union's demands are modelled on guarantees won for members in BBC Technology before it was sold to Siemens in October 2004. Staff were promised that terms and conditions would not be changed for at least three years, there would be no compulsory redundancies for at least 12 months, and they would be given access to a final salary pension scheme with benefits broadly comparable to the BBC's own.

In the final weeks before the Technology sell-off, BECTU members voted for industrial action to win adequate protection, and eventually accepted the final package won by the union. BECTU has vowed that staff involved in any future privatisations should be given protection at least as good as the package from Siemens, and the demands tabled with BBC Broadcast call for guarantees to last for the life of the company's contract with the BBC.

Privatisation of BBC Broadcast, which is opposed by all the BBC's unions, was proposed in December 2004 as part of a major overhaul of the Corporation by new Director-General Mark Thompson.

According to a review he commissioned into the BBC's commercial subsidiaries, there was no need for the Corporation to directly own either BBC Broadcast, or another company, BBC Resources Ltd, which provides TV programme-making facilities to the BBC.

The government's Green Paper on the future of the BBC, published on March 2, echoed Thompson's theme by saying: "We recognise the arguments behind the BBC's suggestion that BBC Broadcast and BBC Resources are candidates for sale or joint venture".

BBC Worldwide, also a wholly-owned subsidiary, escaped the threat of full privatisation, but is likely to lose many internal business units to private owners as the company is slimmed down to concentrate on activites related directly to BBC programmes, and exploitation of the Corporation's archive. This process has already begun, with the sale in January this year of Worldwide's Eve magazine to Haymarket Publications.

Staff in BBC Resources are still waiting to hear if their company is definitely to be sold off. At present, the BBC is debating the details of a move to Manchester of key TV production departments Sport and Childrens', which could have a devastating effect on BBC Resources' workload in London. Until decisions have been made about providing TV facilities in Manchester, it is unlikely that Resources would be offered for sale, although management have hinted that component parts of the company could be privatised earlier if buyers came forward.

Letter from BECTU to BBC Broadcast

8 March 2005
Ms K Hollister
Dirctor of Human Resources
BBC Broadcast Limited

Dear Kath,

Proposed sale of BBC Broadcast Limited

I am writing to set out our claim on behalf of our members employed by BBC Broadcast Limited. The BBC has indicated its clear intention to sell the company in the near future. We are opposed to the sale and do not believe it is in the best interest of our members, the BBC or the licence fee-payers. However in the event of the sale going ahead we believe it is vital to protect our members and we would claim the following:

  1. The sale to be explicitly treated as a TUPE by the BBC and the new owner.
  2. All existing terms and conditions, including the Agreed Statements will transfer to the new company and there will be no reduction in the terms and conditions of the staff for the duration of the contract with the BBC.
  3. There will be a mirror-image pension scheme set up for all existing employees of Broadcast, which will be protected for the duration of the contract with the BBC with no reductions and benefit.
  4. There will be no compulsory redundancies for the duration of the contract with the BBC.
  5. Staff, wherever they are based, whether in London or outside, will not be required to move location.
  6. All new staff will be engaged on the same terms and conditions as existing staff and will have access to the final salary pension scheme.
  7. In the event of a management buyout of any kind, or management involvement in the sale of the company, staff will be entitled to participate in any equity offering.
  8. The existing recognition agreement with BECTU will continue including the deduction at source of subscriptions.
  9. The existing procedure for the avoidance of disputes will transfer.

We would expect these claim to be communicated to any venture capitalists or prospective buyers so that they understand that the culture of the company includes full trade union recognition with all that entails.

I will be copying this letter to Gillian Alford and Peter Phillips, who is overseeing the sale process.

If you have any queries please contact me.

Yours sincerely

 

Luke Crawley
Supervisory Official
BECTU

Report on meeting held 1 March 2005 with BBC Broadcast Ltd before company was officially advertised for sale.

Summary

At a previous meeting on 12 January 2005 (Read previous report here) the union had been promised a further opportunity to meet the company prior to the publication of advertisements offering it for sale.

BECTU repeated the union's opposition to the privatisation of BBC Broadcast, and reiterated a demand that if the sale went ahead, staff should be given concrete guarantees about pay, conditions of service, and pensions. The union also called for the workforce to be given a stake in the company's ownership if, for example, the current management bought into its equity, or were given share options by a new owner.

Management revealed that the first advertisement would appear on March 4, and that they were still committed to a sale before August 2005. .

Timetable for sale

Management laid out a clear timetable beginning with the appearance of the first advertisement in the Financial Times:

  • March 11
    All declarations of interest from parties who might buy BBC Broadcast must be received. If a management buy-out were declared at this point, the executives involved would be expected to resign their posts in order to work on their bid.
  • Mid-March
    Interested bidders receive questionnaire, and are given more information about BBC Broadcast.
  • Early April
    A "long list" of suitable bidders will be compiled, and futher examamination of their bids will commence.
  • Mid-May
    Indicative bids, including cash offerings, to assessed, and short list compiled. Process of due diligence within Broadcast will be completed by this point
  • June/July?
    Preferred bidder selected - BBC vague about exact timing in order to play bidders off against each othe until last moment if necessary.
  • August 1
    BBC target date for sale - possibly complicated by need for approval from DCMS.

Management were questioned about the absence of any fixed date for naming a preferred bidder, and expressed concern that this would theoretically allow a buyer to complete the sale almost immediately after being named.

This would contrast unfavourably with the process in the case of BBC Technology being sold, where there was a gap of several weeks between Siemens being named, and the sale being completed, during which the union had made significant progress in winning protection for members.

Management confirmed that the exemption of the Broadcast sale from European procurement rules, despite involving the transfer of a contract worth more than £500 million, would allow such a fast completion of sale, although it was unlikely in practice to take place so quickly.

BECTU asked if the advertisement, or the questionnaire sent to potential bidders, would make reference to staffing issues, particularly the current workforce's membership of a final salary pension scheme. Management said that these would be raised with bidders later in the process, but that the "cultural fit" of prospective purchasers would be a factor in shortlisting.

Exactly who is being sold?

Union representatives were told that some details of the sale had not yet been finalised, but decisions would have to be made before more detailed information was sent to interested parties. The situation of areas affected was:

  • Audio Call
    Not in the sale - no "compelling logic" to include this department according to management.
  • Broadcast EPG
    Electronic Programme Guide section is included in the sale.
  • Presentation Engineering Coordinators
    Broadcast's team of PECs would be included in the sale - although they had responsibilities to the BBC itself, management were content that these could be adequately fulfilled even if the PECs were employed by a private company.
  • Disaster recovery
    Facilities for playout of BBC programmes in the event of catastrophic failure in West London will be included in the sale.
  • Media Planning
    Broadcast Data Services     (part of BBC Worldwide)
    No decision yet on whether either of these will be included in the sale.
  • Other departments
    Broadcast management confirmed that some other areas, both within the company, and within the BBC itself, were still being considered for inclusion, but declined to name them publicly.

What is the role of Broadcast's current management?

By implication, the existing management team would transfer if Broadcast were sold, since they were all directly employed by the company.

A management buyout of Broadcast was still a possibility, and would be welcomed by the BBC, but the current team felt that any buyout would be better left until the sale process had reached the shortlist, or preferred bidder, stage. If they declared an interest at this point - when expressions of interest were being invited - they would be expected to resign their positions to avoid any conflict of interest.

Management said it would be improper to ally themselves with any specific bidder early in the process, due to the clear conflict of interest posed by their involvement in the teams overseeing the sell-off. However private equity investors could not be prevented from devising future ownership models that involved the management having an interest.

BECTU repeated an earlier demand that if the current or future management team had any share of the company's ownership, the staff should have a share as well.

Next steps

BECTU agreed to formalise a call for staff to be promised protection of employment, conditions of service, and pension rights for staff in the event of Broadcast being sold off, and asked for access to the "long list" of bidders once it had been compiled. Management agreed to this, provided individual bidders were willing for their interest to be revealed.

Management agreed to set up another meeting with the union in early May, by which time the field of bidders, and their intentions as far as staff were concerned, would be clearer. BECTU would be free to demand earlier meetings if necessary.

Union members will be invited to meetings about the sell-off in early April, where full discussion can take place about the strategy to achieve full protection for staff if the sale goes ahead.

9 March 2005