BT union demands inflation-busting pay rise - or they'll strike

Regardless of the CEO's bonus, can BT staff seriously expect to get a 5% pay hike this year?

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Last Updated: 31 Aug 2010

It’s a bit hard to imagine anyone looking at the strategy currently being employed by the unions at BA and using it as model for their own industrial relations. But that appears to be the case at BT, another once-nationalised giant that’s been feeling the pain lately: its biggest union is threatening to walk out on strike unless management agrees to an inflation-busting 5% rise. Now it’s true that things are looking up at BT, and the £1m bonus CEO Ian Livingston stands to pocket as a result is being used by the unions as justification for their demands. But at a time when we’re barely out of recession, when unemployment is rising and BT itself has just shed 35,000 staff, isn’t it about time the union faced up to harsh economic reality?

BT is due to publish its annual report today, which will include details of bonus hikes for senior execs after the telecoms giant swung back into the black last year. The CWU is currently embroiled in a pay dispute with BT – it’s currently angling for a 5% pay rise for all staff, while BT is refusing to go higher than 2% - so not surprisingly, it has jumped on this as evidence of a blatant lack of fairness. If Livingston gets a seven-figure bonus for steering BT back to profitability, they argue, why shouldn’t their members, who deliver the work, get a piece of the action too? It’s now apparently planning a strike ballot, which could mean BT’s first walk-out in 25 years.

BT shows no sign of backing down though. It’s apparently trying to work out how managers can cover workers if they strike, and it’s even smacked the ball back into the union’s court by trumpeting its support for performance-based pay (like these bonuses). The implication is that the CWU isn’t offering much in the way of guaranteed performance improvements in return for that 5% hike.

Feelings are obviously running high at BT; Livingston’s cost-cutting efforts have already resulted in massive job cuts (albeit he claims to have focused on temps and contractors rather than full-time staff), and there was an across-the-board pay freeze last year. Equally, it's fair and proper that the rewards of recovery are shared among all staff, not just management.

However, BT staff are hardly unique in feeling the squeeze lately – employees everywhere have suffered as companies have looked to cut costs (which in turn has helped to minimise job losses). What's more, BT is still in a very challenging position: it continues to grapple with an uncertain economic climate and a massive pension deficit. So a big increase in costs – or the inevitable disruption and financial loss of a strike – is the last thing it needs. The CWU is right to fight for its members, but demands like these are at best optimistic, and at worst irresponsible.


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