Staff at the City watchdog could go on strike in the coming months as a row with bosses over pay and bonuses escalates.
Unite, the union representing staff at the Financial Conduct Authority (FCA), is balloting its members at the regulator this week on whether to take industrial action. The ballot was launched on Monday and will close next Monday at 5pm.
The move is the latest escalation by the union in a dispute over a new pay structure being brought in at the FCA by chief executive Nikhil Rathi.
Under the new system, staff bonuses will be axed and new salary grades will be introduced that vary depending on location.
Staff are concerned that the new proposals will result in three out of four employees facing pay cuts of up to 12pc, the union has claimed.
Dominic Hook, Unite national officer said: "You cannot regulate the British financial system on a bargain basement basis as the chief executive, Nikhil Rathi clearly wishes to do. Management must enter into immediate negotiations with Unite the union in order to avoid further damage and risk to the FCA.”
Last month, The Telegraph revealed that the watchdog had brought in spinners from a leading City PR firm to handle internal communications as it grapples with a staff revolt over the reforms.
Unite said the decision to ballot its members comes after management “refused to negotiate with the workforce on a programme of severe cost-cutting”.
But bosses at the regulator are pushing ahead with the reforms, which they insist will increase wages for its lowest paid staff.
Unite said it has seen “significant growth” in membership from FCA employees in recent months but has not specified how many workers have signed up to the union.
Last year, Mr Rathi accepted that he was “proposing to make tough decisions” on pay, adding: “We recognise the impact of this proposal. However, it is important we place it within the context of the new employment offer we are making.”
A spokesman for the FCA said: “Our pay and reward proposals would ensure the FCA continues to provide one of the best employment packages of any regulator or enforcement agency in the UK.
“Our proposals focus on those paid the least, with 800 colleagues below manager-level in line for salary increases of, on average, £3,800.
“We are now carefully considering the feedback received during our extensive consultation with colleagues with the aim of announcing the outcome by March.”