LONDON -(Dow Jones)- The Communications Workers Union Tuesday has recommended its members that work for O2 PLC (OOM.LN) reject the company's proposed pay offer after talks between the mobile telecommunications company and the union collapsed.
The CWU said that if members reject the pay offer, as it expects them to, it will ballot for industrial action if O2 doesn't improve its offer.
CWU Deputy General Secretary Jeannie Drake, said in a statement: "O2's current divisive and derisory offer represents one of the bleakest messages delivered to any group of workers in recent years...It's a real kick in the teeth and O2 employees are not going to take it lying down."
An O2 spokesman told Dow Jones Newswires that talks have collapsed as a result of the CWU's rejection of performance-related measures which are standard across the industry. He said O2 wants to replace the system it inherited from BT whereby flat pay rises for all staff, regardless of performance, were negotiated with the CWU.
"We want to pay competitive market rates for the job and reward the best performers on top of that. We're not looking to cap anyone's salary," the spokesman said.
He said of O2's 8,000 U.K. employees, about half of its staff are already on performance-related contracts.
The CWU said the offer means those workers won't receive a consolidated salary increase for around seven years.
The union argues that while O2's top management's salary has increased substantially since O2 was split out of BT Group PLC (BT) in 2001, the average wage has declined. It said that since November 2001, the earnings potential of CWU members has fallen by 10% and that of new employees by 35%. However O2 Chief Executive Peter Erskine's salary has risen 76% over the same period.
The O2 spokesman said around 2,000 of its U.K. staff are CWU members.
Company Web site: http://www.o2.com
-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; firstname.lastname@example.org
(END) Dow Jones Newswires"
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