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BT Pay 2010: CWU Respond to BT Briefing (10 May)

12 May 2010

On 10 May 2010 BT issued a briefing to people on NewGrid grades in response to questions from team members.

Below is a response to the briefing that gives the CWU’s position on the same questions raised in the BT briefing.

You mention in your previous communications pay deals with other companies - do you have some examples?

The Royal Mail deal means 2% from 1 April 2010, but it must be seen in the context of a three-year deal which means a 6.9% increase in basic pay, lump sums of £1,400, enhanced ColleagueShare payments of at least over £1,000, an hour off the working week and the conversion of existing payments into guaranteed basic pay supplements.

Royal mail’s operating profit was up by 4% in the half year to September 2009, but its free cash flow was negative with an outflow of £434m. BT’s operating profit was up 19% in the third quarter to December 2010 and free cash flow was a positive figure of £305m. This makes an improved offer much more affordable for BT.

Virgin Media - Although the company increased overall revenues and operating income, its first quarter net loss grew to £160.4m (March 2010). This contrasts sharply with BT’s net profit of £62m for the third quarter to December 2009, and £822m for the nine months to December 2009, showing that BT can afford more.

British Gas workers received 1.8% from January 2010, but they also received 4.1% in January 2009, when BT workers got nothing on their basic pay.

BAE workers received 2% from April 2010 but also received 3% from April 2009, when BT workers got nothing on their basic pay.

Income Data Services found the proportion of pay freezes has declined in its latest analysis to February 2010. Most settlements recorded for this period, showing a median of 1.8%, were made against a backdrop of deep recession and following a period of historically low – even negative – inflation. Even so, upper quartile settlements for the same period were 2.5%. With rising inflation and the economy stabilising that situation is changing and IDS recorded a number of awards at 3% effective from April 2010. We can therefore expect the median pay settlement figure to rise for the next three month period.

Companies settling above 3% in recent months, include:

  • Dow Corning (technical) – 3.5%, from 1st April 2010. (pay freeze last year)
  • Electrical Contracting JIB – 5% from 4th Jan 2010. They also received 4.5% from 5th Jan 2009.
  • Kimball Electronics – 5% from 1st April 2010, and 5% from 1st April 2009.

When will the 2010 pay award be implemented?

There has been no indication from BT that they wish to move to implement the company’s ‘final’ pay offer. However, any such move would be strongly resisted by the union.

What happens next and will there be further meetings with the CWU?

The CWU has made clear to BT that we remain willing to meet with the company to resolve the current situation, but this must be against a backdrop of the company accepting that our members both require and deserve an improved pay award.

We do not know what plans BT are making to ‘protect the business’. However, we can reassure members that they are legally entitled to take official strike action and the law protects them from dismissal for doing so. Any concerns about the replacement of staff by agency workers can be addressed by the fact it is illegal for an employment business to supply temporary workers to replace employees who are on strike. Even if the law did not stand in the way, it is unrealistic for BT to replace its workforce during a strike given the need for thousands of skilled specialists who simply do not exist in the required numbers.

Why are the profit related awards non-pensionable?

It is as BT says normal for profit related awards to be non-pensionable, and non-consolidated. That is why the union has made it clear we reject this form of pay award. We are seeking a fully consolidated, pensionable award that reflects your contribution and meets the rise in the cost of living. The Pensions Regulator is not expected to make any changes to BT’s current pension deficit repair payments, so a pensionable pay rise will have no impact on the repair payments BT are making on the £9bn deficit.

October salary progression

The October salary progression review is completely separate from the annual pay review. Incremental pay progression is a contractual right and reflects development within a role. It is not designed to address increases in the cost of living, which is the primary purpose of the annual pay review.