Legal battle over India jobs switch

Published on 17/08/2004 13:26

• Off-shoring threat to 100s of city posts

• ’Move breaches Data Protection’

• Action success could hit all UK job transfers

SCOTTISH Widows owner Lloyds TSB is facing a legal battle over its plans to transfer Scots jobs to India.

The challenge, which claims the move would breach the Data Protection Act, threatens to throw plans by several banking giants to shift jobs to the sub-continent into chaos.

Hundreds of jobs in the Capital alone are under threat from the off-shoring plans, and a successful legal challenge would frustrate moves to transfer thousands of jobs from the UK.

Lloyds TSB’s plans to switch work to India are being challenged on the grounds they infringe the Data Protection Act by processing "sensitive personal data" abroad without the consent of customers.

The case against the bank is that India does not have the same stringent standards of data protection as are legally required by the Data Protection Act 1998.

Scottish Widows has created 50 jobs in India in a pilot scheme which, if successful, could pave the way for hundreds of Scots jobs to go to India.

The test case is being brought by an unnamed customer and backed by Lloyds TSB Group Union (LTU), which is strongly opposed to any moves to transfer jobs abroad. The government-appointed Information Commissioner, Elizabeth France, is being asked to rule on whether Lloyds TSB is acting legally when transferring sensitive personal data abroad.

If the challenge, handled by solicitors Bindman’s, is successful, thousands of customers would have to give written permission and many banks and building societies may be deterred from trying to offshore jobs because of the difficulties this would cause.

Other banks already operating abroad may be forced to bring operations back to the UK.

A flood of similar legal challenges from customers who have had their accounts dealt with abroad could also ensue if banks are found to have breached the Data Protection Act.

LTU assistant secretary Peter O’Grady said: "If it is successful, it would have wider implications for the whole of the banking and financial services industry."

Banks and building societies which have already offshored work to India include Standard Life, Aviva and Prudential, and it is believed a further 20,000 jobs in the UK are at risk.

Scottish Provident - owned by Abbey - has also launched a pilot scheme involving the outsourcing of work to India. Abbey is conducting a similar pilot project to transfer about 100 data processing posts at Scottish Provident from Glasgow and Edinburgh to India. Norwich Union is shifting 60 Edinburgh jobs to India.

The LTU was today asking customers visiting the Hanover Street branch of Lloyds TSB to sign a petition against the transfer of jobs.

Mr O’Grady said: "The customer concerned came to us with concerns about their data being processed overseas. That’s what we’re hearing on the street, that people have concerns about that."

A spokesman for Lloyds TSB said: "We are confident that we comply with the Data Protection Act and our customers can be reassured that their personal information is as protected in India as it would be in the UK.

"Security is of the utmost importance to us and we constantly monitor security and compliance within all our operations and have put a number of measures in place to ensure the protection of customer data wherever it is processed."