More than 500 St Mungo’s Broadway staff, who are members of the Unite union, are being balloted on strike action after passing a vote of no confidence in the management of the newly-merged charity.

Homelessness support charities St Mungo’s and Broadway merged in April his year. Charles Fraser, chief executive of St Mungo's, stepped down after leading the organisation for 20 years and Broadway’s chief executive, Howard Sinclair, became chief executive of the new organisation.

Unite is concerned that changes to workers terms and conditions are being made by the new executive team are being made without consulting with the union.

Nicky Marcus, regional officer for Unite, said: “They have slashed the pay of new starters by £5,000 a year for a project worker, and for existing staff being restructured; taken pay out of collective bargaining; imposed new, draconian policies and procedures; and breached the recognition agreement with Unite repeatedly.”

The union also warned that the changes will have a negative impact on the services provided by the charity. Marcus said: “Cheap labour, downgraded roles, staff working under minimum standard policies and procedures are never a path to quality in social care.”

Marcus added: “We urge the management to have a radical re-think of their current approach. They have exported an arrogant, controlling managerial style, downgraded policies, procedures, roles and pay rates from their own failing company to allegedly ‘secure the future’ of a highly successful, flourishing company with year on year surpluses and 10 per cent  growth last year.”

Sinclair said: “We deeply regret that Unite has taken the step of balloting and remain open to talks with staff and Unite representatives.”

He added that the charity had no plans to make anyone redundant and that existing staff are unaffected by the proposed changes.

“We remain committed to paying at least the Living Wage. We do propose paying new staff to the median level for our sector. Our priority remains providing services of the highest quality for the increasing numbers of clients we are seeing, within the ever tighter economic environment,” he said.

Unite also criticised Sinclair’s pay rise of £30,000 when he became chief executive of the merged organisation.

A spokesman for St Mungo’s said: “Howard Sinclair was appointed by the board to the new post of chief executive of St Mungo’s Broadway, an organisation with about 1,200 staff following the merger. He is paid at the same salary level as the previous chief executive of St Mungo’s.”

Ahead of the merger St Mungo’s had an income of £49m and Broadway had and income of £15m. Broadway’s spending had been slightly more than its income in each of the past five years and at the end of its latest financial year its reserves stood at just under £2m.

Before merging with St Mungo’s Broadway withdrew from a merger talks with public services charity People Can, which subsequently went into administration because the of the extent of its pension liabilities.

This cost Broadway £94,000 in professional fees and is one of the reasons given for the £255,000 deficit in the 2013 accounts. It also spent £92,000 in planned investment to improve its systems and fundraising capacity. 

In 2013 six workers at a hostel run by St Mungo’s went on strike over a dispute about pay and conditions and last summer Unison members at Broadway expressed concern about the possibility of a relationship with Serco.

The ballot closes on Tuesday 7 October.