Rosemary Gallagher: BA backlash looms after staff agree to work for free

Published on Saturday 27 June 2009 13:55

WILLIE Walsh may have won a battle in his bid to cut costs and ensure the survival of British Airways, but the war is far from over. The chief executive of the struggling airline last week hailed it as a victory that 800 staff have volunteered to work for nothing for up to a month after being told the company's future was "definitely at risk". He was given a further boost when the entire 11-member board of the airline also agreed to follow his lead and forfeit a month's salary.

Walsh described the agreement as a "fantastic first response". But just how fantastic is the fact that only a tiny percentage of BA employees agreed to work for nothing? Walsh has also angered unions, which are accusing him of using scaremongering tactics to get low-paid workers, many on salaries of 11,000, to give up their income.

It's hardly surprising, therefore, that the backlash against Walsh has intensified. The Unite union, which represents the BA cabin crew, is threatening a summer of strikes to protest against cuts in pay, perks and jobs. Tuesday looks set to be D-day as this is the deadline Walsh has set to conclude a deal with staff. If no resolution is reached, air passengers should be bracing themselves for industrial chaos.

BA lost 401 million in the year to 31 March and Walsh has made it clear that the airline's survival relies on finding millions of pounds of savings. If he doesn't succeed in pushing through his drastic changes in working conditions, the burning question is whether the government will step in to save the iconic airline, as it did with banks. If not, it will be blasted for letting Britain's national carrier fail. If it does stump up the cash, how many companies in other sectors, from construction to car manufacturing, will be queuing up for their share of taxpayers' money?

New data protection boss must get tough

THE threat of a surprise, early-morning visit by the police would send a shiver down anyone's spine. So businesses won't be looking forward to the prospect of dawn raids being carried out on their premises if they breach data protection rules.

Christopher Graham takes over from Richard Thomas as the UK's information commissioner this week. Companies are bracing themselves for the hard line he is expected to take on those who break data protection laws. Experts are saying that Thomas, who fought for dawn raids and fines for offenders, will be a hard act to follow. Graham will quickly want to make his mark by proving he is as tough as Thomas and push through legislative changes to the Data Protection Act. Hermione Hague, a senior associate at McGrigors law firm, predicts that far from halting the crackdown on data protection blunders, Graham will up the ante.

While this may not be a welcome prospect for companies already struggling under the burden of red tape, all the evidence suggests data protection law is badly in need of beefing up.

In recent years there have been too many high-profile blunders which have left millions of consumers feeling vulnerable. The most controversial of all was in 2007 when Her Majesty's Revenue and Customs put half the country at risk of identity fraud. A junior official put discs containing information on child benefit recipients in the post. As we all now know the discs never turned up. In another infamous incident, Nationwide Building Society left millions of customers open to the same risk when a laptop computer was stolen.

Given the severe potential consequences of such mistakes, there should be the legislation in place to enable equally severe action to be taken. And this is likely to happen if Thomas and Graham have their way. As well as the introduction of dawn raids, The Information Commissioner's Office (ICO) is negotiating the details of imposing fines on offenders. According to Hague, such fines are likely to be high and linked to a company's turnover. McGrigors also points out that the ICO is building up its presence in Scotland, so firms north of the border must be on their toes when it comes to data protection.

Too soon to talk of green shoots

WITH all the talk of "green shoots" we could be forgiven for thinking the economy is on the road to recovery. But optimism may be premature. Tuesday will bring the publication of revised national accounts data for the first quarter of the year. It is expected to show that GDP shrunk by 4.4 per cent year on year, rather than the 4.1 per cent previously reported. It seems the UK has more harsh times ahead before the shoots will blossom into sustainable growth.