According to Unite, Harrods is preparing to use agency workers to replace staff who could go on strike, making them the first major firm to take advantage of controversial new laws. The retailer sent a letter to staff ahead of an industrial action ballot, with approximately 150 staff set to vote over what the union calls a “pay cut disguised as a rise”.

Unite said staff had rejected an initial 5% pay offer and talks with the conciliation service ACAS had been agreed. Two days before the talks, and without notifying Unite’s workplace representatives or officials, Harrods reportedly wrote to security staff offering them a 7% pay rise to bring their wages up to industry standards. The strike ballot was announced in response to this offer.

Harrods’ letter to staff working in store services, engineering, maintenance and security, reportedly stated:

“Recent legislative changes relating to the Conduct of Employment Agencies and Employment Business Regulations now allows agencies to provide temporary workers to perform duties normally performed by a worker who is on strike. We are therefore no longer restricted from engaging temporary workers should any industrial action take place now or in the future.”

In July, MPs approved controversial changes to the law to allow agency workers to fill in for staff on strike, partly in response to rail workers staging strikes over pay disputes and working conditions.

Prior to the proposal being approved in Parliament, the Government’s press release announcing the plans explained the benefits of removing what they describe as “burdensome legal restrictions”, while noting that health and safety rules may still limit how agency workers can be used to cover striking workers.

It said the changes “will give businesses impacted by strike action the freedom to tap into the services of employment businesses who can provide skilled, temporary agency staff at short notice to temporarily cover essential roles for the duration of the strike.”

An individual doing paid work in the UK is either a worker, an employee, or self-employed. The differences in status determine pay and benefits, the type of contract they receive for completing the work, as well as the employment rights they are entitled to.

Unite general secretary Sharon Graham said:

“It comes as no surprise that Harrods – known for catering to the supremely well-off – could be the first employer Unite has come across to threaten low paid staff with the recent government legislation designed to break strikes. Harrod’s attempts to use this new legislation to bully our members doesn’t change a thing. Unite is prepared for all eventualities and our members at Harrods will receive the full backing of the union in their fight for a fair pay rise.”

Unite regional officer Balvinder Bir said:

“At every turn, Harrods has tried its best to union bust. From threatening members with the new agency worker laws, to trying to negotiate around the union and ACAS by sending individual workers letters. All in order to force through a pay cut disguised as a rise. I’m sure the high-end brands that sell through Harrods, such as Gucci, Dolce & Gabbana, Prada, Louis Vuitton, Versace and Stella McCartney, will be embarrassed by Harrods' tactics. Harrods needs to return with a pay offer our members can accept before this dispute escalates.”

A Harrods spokesperson said:

“As a business, we undertake rigorous and regular benchmarking to ensure all colleagues are paid competitively. Our base pay rates are very competitive within the industry, and the pay rise we have offered will ensure this remains the case. Unfortunately, we are unable to award these payments to all impacted colleagues until pay negotiations have concluded with Unite. This is why it is extremely disappointing that Unite continues to delay this pay increase being awarded and backdated for the colleagues in this group. This is our number one priority. We continue to urge Unite to work with us to ensure this is swiftly resolved for the benefit of all our hard-working and dedicated colleagues.

“While we are able to engage temporary workers if industrial action occurs, this is certainly not our preferred course of action. That is why we are urging Unite to work with us to resolve this matter as swiftly as possible.”

Samantha Dickinson, Partner at Mayo Wynne Baxter, said:

“The Conduct of Employment Agencies and Employment Businesses Regulations 2003 prevent an agency from supplying a company with temporary workers to perform duties normally carried out by a striking worker, but employers can already circumvent this by employing staff directly. Altering the legislation will mean employers can be more agile when faced with strike action as we head into a summer of discontent with further strikes looming at train companies and across other industries; presuming of course there are qualified workers that can be called upon.”