Union leaders have once again complained about performance-related pay at the City watchdog, saying new grading schemes are “weighted towards punishment” as they continue to balk at reforms to the regulator’s reward structures.
Employee union Unite said its members had rejected the FCA’s 2024 pay offer, citing lacklustre sub-inflation pay increases, though only a minority of FCA staff belong to the union.
This came after a series of bruising run-ins with unions who staged strikes through 2022 in a dispute over pay and conditions, when chief exec Nikhil Rathi introduced performance-related pay, the only regulator to have successfully done so.
He described the move as a “tough decision” but said that previous structures had not been effective at driving performance.
This year’s dispute centres around overall pay levels.
In a letter to Rathi last week, Unite noted that a “significant number” of the regulator’s 5,100 employees earned below the Joseph Rowntree Foundation’s Minimum Income Standard of £29,500 a year, which it defines as the salary needed “to reach a minimum acceptable standard of living”.
City A.M. understands that the majority of those below the £29,500 threshold – representing just one per cent of the regulator’s staff – are in fact apprentices.
Unite added that it would look at creating its own hardship fund for members this year to meet demand.
A report from the House of Lords published earlier this month warned of a “massive pay gap” between regulators and City firms that could risk drawing top talent away to the private sector. The FCA abolished bonuses for its staff in 2022.
The FCA announced last month that it would boost staff salaries by an average of 4.83 per cent, with the highest performing employees seeing pay rises of between 3.5 per cent and 6.5 per cent.
Unite said last week that the FCA’s decision to abolish inflation-linked base pay rises, instead basing pay increases on a five-point performance scale, was “harmful and confusing”.
It claimed the average associate and senior associate would see just £25 to £45 extra per month if they achieved a “high” or “average” performance rating.
Employees at the lower end of the scale will receive a 1.5 per cent pay rise, while inflation currently stands at four per cent.
Unite said the wider pay gap between “poor” and “average” than “high” and “average” meant the measures were “weighted towards punishment rather than reward”.
It added that “a large portion” of new joiners were initially placed in the “poor” part of their pay band, with some employees allegedly not told about this informal practice.
The union also said the FCA had delivered “delivered some of the poorest staff consultations on pay Unite has observed in the public sector”, which were at times a “toxic environment for staff representatives volunteering their time to serve a vital function”.
Unite claimed staff representatives were provided with little information and could only meet decision makers on the day of the decision.
A source within the union said there had been “total silence” from the FCA in response to the letter.
An FCA spokesperson said: “We do not recognise the characterisation of the environment for staff representatives and have recently enhanced our staff consultative committee to include representatives from Unite and FDA.
“The overwhelming majority of staff at the FCA are not members of Unite. We will respond to all feedback received through our robust staff engagement mechanisms.”