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The Bank’s Unethical Use of Labour

Updated on June 19, 2013

"We are the pounds and pence, dollars and cents, we're gonna crack your little soul"

In Britain the banking industry has a bad reputation chiefly because of their complicity in the economic down turn. It has almost become cliché to write about “toxic assets” and the “bail out”. And yes people are still angry about the Libor Scandal which represents the flippant risks taken by bank employees to improve their own circumstances with our money. Is there another scandal in the pipeline? Digging beneath the self rewarding veneer of the big banks is the unrepresented poorly paid workforce, often manipulated into taking up positions with hollow promises. Traditionally temporary employees are used for seasonal work or to cover maternity leave. However many of the big bank’s contact centres are staffed with a plethora of staff on (“on going”) temporary contracts with very few benefits. And these contact centres are not based in so called poorer countries; they are smack bang in Britain’s biggest cities. Lloyds Banking Group, RBS and Tesco Bank are but a few who take advantage of the “on going temp” labour market. When using the carrot and stick approach if there is no carrot, other than the failed promise of one, then an ethical discussion must be had.

The UK has the highest number of temporary employees in Europe at some 1.3 million according to the International Confederation of Private Employment Agencies. Of those the TUC (2007) reports, 25% are not entitled to contractual sick pay and 14% do not receive holiday pay.

There is a vivid distinction between and “on going temp” and a permanent employee which would make the former more attractive than the latter to an employer. For instance, a temporary employee will not have the same union representation that a permanent staff member has. Therefore, straight away an employer can dilute the potency of dissenting voices. A temporary contract can also be cancelled with immediacy which can make the infirm or ailment prone even more vulnerable. I have witnessed contracts being cancelled for employees who have had relatively modest amounts of time off sick whilst permanent staff members have been off sick for many months without rebuke. Perhaps in response to this one might argue that using these contracts limit absenteeism to genuine sick days. However, there is much more to it than that. I have spoken to individuals who have been on temporary contracts at RBS and they have been cancelled for poor credit card “sales” performance. A somewhat audacious tactic to use considering the credit crunch (and reasons for it) is so fresh in the mind. To use an individuals employment vulnerability to “motivate” them to sell credit, in the midst of a credit induced recession, for which the banks received unprecedented governmental support, is shameful.

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The banks employ recruitment agencies who are actively ambiguous when recruiting about the nature of the contracts. Some go as far as to state the temporary contract is only temporary until the worker proves his/her competency. An individual will be employed with the idea that the contract will turn permanent after a set period. This illusion is reinforced whilst training with the bank so as they don’t waste resources on a short term temp. The limbo is constant as the banks utilise ambiguity to have their temporary staff constantly believing a secure contract is only weeks away. The ones I have spoken to have told me of some of the stories management concoct. One such was that the person who needs to organise the contracts is stuck abroad. Amusing on several accounts: 1. does an institution employing several hundred thousands employees really only have one person organising contracts, and 2. Abroad is a vague destination.

So why is this unethical? Is it not wise and efficient to keep staff motivated?

What we don’t see is the tightrope temporary labour walk upon. A temporary worker will find it difficult, if not impossible, to get a mortgage. Often their contracts are terminated at extremely short notice without any compensation. Often they must develop themselves out of fear of being suddenly unemployed. In order to stay employed one would have to be of a higher standard than the permanent staff. This also spills into over time expectations where the bank would frown upon temporary staff that don't, or can't, do over time whilst permanent colleagues could come and go as they please. Frequently their services are dismissed for very minor indiscretions. The banks continue to use temporary labour even on an “on going” basis because of the reduced rights they have. In addition to that, many are too scared to book medical appointments and attend work when visibly ill out of fear the bank will cancel their contracts.

A temporary worker has to generate holiday hours before they can take holidays. The banks can force them to take holidays before they have accrued holiday pay which results in temporary workers having to take unpaid breaks. Temporary contactors are often paid little more than minimum wage so they are not finically able to take unpaid holidays.

Another purpose of the banks insincere policy is that they do not pay bonuses akin to their permanent employees who often are not as effective due to the lack of constant fear for their livelihoods. This seems to contradict the website which states that a temporary worker, after 12 weeks, should receive the same benefits and entitlements of a permanent colleague. Permanent employees are also not restricted in applying for internal positions therefore there exists a two tear culture of reward. As a result positions are not based on merit and frequently are given to those who are from a culture which brought our economic system to the brink of collapse.

Quality of Service

In the call centre side of banking operations, employees are measured on how many calls they process per hour. An aspiring temporary employee, operating under the pretence that a full time contract is only weeks away, will focus more on managing numbers than quality of service. Customer’s who call with complex issues or enquiries can be “pumped” around departments as they may harm on employees performance figures. Further evidence, if any was needed, that the customer is an inconvenience to the bank’s goals. In addition to that the integrity of customer’s data is at risk here. Police in Glasgow state that 1 in every 10 call centres in Glasgow have been infiltrated by gangs with the aim of selling date. The Telegraph reports that identity theft was up 32% in 2009. This appears to correlate with the increase in temporary employees being used to service call centres.

Britain has invested billions into the banking system which preys on the ambition of those striving to pursue a career in financial services. They use fear to prevent them from attending interviews, during work hours, and as a result, thousands are stuck on “on going temporary” contracts for months and years. These institutions are now so reliant on temporary staff they can not run effectively without them. This is not a healthy situation as it means financial institutions have a stake in employing temporary staff for long periods of time. This is particularly worrying as being treated fairly at work was something our fathers, and theirs before, fought very hard for.


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      Jean Valerie Kotzur nee Stoneman 5 years ago from Germany

      As an English person living on the Continent since 1965 and also not always up-to-date with the details of everything going on back home, I was quite shocked after reading your hub. I know as well as anyone else that there are companies that operate on an unethical basis, but I didn't realise that it was so bad. The employment climate in the late fifties and sixties was very different. Of course there were people who were manipulating systems for their own benefit, but in general, what was written in your Employment Contract was binding for both sides and most people respected this.. I think job security played a large part in allowing employees to relax and get on with their work. Nowadays everything is transient. Apart from job and family, employees are constantly having to attend courses to better understand the Company Policy and the changing internet world. They are constantly under pressure so hence stress and burn-out. When I read things like this I am glad that I am now a pensioner. Thanks for a well researched hub and a wealth of information.

    • Lizam1 profile image

      Lizam1 5 years ago from Victoria BC

      Thanks for shinning a light on this problem. In Canada there are huge numbers of workers being underpaid and on short term or hired under the legal limit of :employee" hours which means they are cheap and easy to get rid of.