O2 Improves Staff Pay Offer To Avoid Industrial Action

LONDON -(Dow Jones)- The Communication Workers' Union, or CWU, Monday said that after negotiations with U.K. mobile-telecommunications company O2 PLC (OOM.LN), it will recommend its members accept an improved pay offer from the company.

O2 has faced the threat of strike action over the issue.

O2 has come under pressure from CWU members since July when talks between the union and the company broke down. The scepter of industrial action was raised as CWU members were urged to reject O2's pay offer. The dispute rested on O2's attempt to move all of its staff onto performance-related measures.

About half of O2's 8,000 U.K. employees are already on performance-related contracts while around 2,000 of its U.K. staff are CWU members.

The CWU said a new, improved offer was agreed on Friday and has recommended the deal. It said details of the offer with be published later Monday.

At 0852 GMT, O2 shares were down two pence, or 1.3%, at 147.5 pence.

O2 said in a statement: "The agreement provides a good outcome for both parties and preserves our principles of 'performance-based pay,' with our best performers receiving the best pay and rewards, and 'market-based pay,' where pay bands for each role are benchmarked to the wider market."

Company Web site: Http://www.cwu.org

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 15th August 2005