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BT Pay Claim 2010: BT Offer Rejected

18 March 2010

CWU negotiators met with BT on 2 March 2010 where the Company made an offer of a non-consolidated increase of 2%, which the Union immediately rejected as unacceptable.

BT outlined its position, which has been confirmed in a letter to the CWU, that it needs to firmly control costs in order to meet its ongoing commercial and competitive challenges. The Company argued that a 5% consolidated award could compound the risks associated with its £9bn pension deficit and that the recent downgrading of its credit rating by Standard & Poors has put pressure on its finances and affected its share price. Whilst headline inflation is currently 3.7%, BT said it is expected to fall later in the year and that commercial prospects are constrained by a still fragile economy.

The CWU hit back pointing to the 11% rise in profits and the £1.6bn cost savings which have been delivered through the talent and commitment of CWU represented employees and their contribution to cost efficiencies through the introduction of new flexible attendance patterns. CWU members have already accepted significant changes to help sustain the future viability of the BT Pension Scheme, and an unconsolidated, non pensionable pay award would further reduce pension benefits and undermine the right to a decent standard of living in retirement. The swift rise in inflation in recent months has put increased pressure on household budgets, and the rise in the cost of essentials like food, domestic fuel and public transport have a greater impact on low and average income households who spend proportionately more on these items.

CWU negotiators reiterated that taking into account last year’s unconsolidated award and the cost savings delivered by CWU members, a 5% consolidated pay award is a realistic expectation this year. A further pay meeting is scheduled for next week.