An industrial dispute at the City regulator is always going to make good copy for financial journalists, and this week’s planned strike at the Financial Conduct Authority is no different. Scratch a little deeper, though, and it appears Unite the Union’s industrial action is more student politics than the first signs of revolution in Stratford.
Let’s start with some context. The FCA that new boss Nikhil Rathi took over at the start of the pandemic was in need of new more dynamism. His predecessor, Andrew Bailey, had overseen a regulator that was not just asleep at the wheel on the LC&F scandal but one that was increasingly looking unlike the innovative City firms it regulates and more like a clunky, public sector bureaucracy. Rathi was brought in to change that.
Reforms to pay are one element of that culture change. To listen to Unite, it is as if Rathi has condemned staff to penury. Yet as the FCA are keen to point out, most of their staff are receiving a 12 per cent pay rise over the next two years. The key frustration appears to be the loss of routine payments which were called ‘bonuses,’ but why a regulator offered such a thing in the first place is beyond us.
The regulator has also consistently pointed out that the reforms will incentivise the strongest performers. Instead of effectively automatic bonuses, staff will be placed into performance-based pay grades. Some who fear not making the grade may not like the new regime, but it is hardly out of step with major corporates.
Rathi is right to give the regulator a shake-up. He has brought in a host of senior talent, talked of the need to become more agile, and if anything seems frustrated he cannot move faster to bring the regulator up to date.
And for all the noise Unite have made in recent weeks, City A.M. understands the number of actual votes for industrial action sits below 300, in contrast to a workforce of more than 4,000. The strike is also occurring just weeks before a union arbitration process which they demanded reports.
Rathi has clearly ruffled a few feathers – but that may not be the worst thing.