BT Reaches Pay Deal With Union To Avert Strike

The prospect of the first strike action at BT since 1987 has been lifted after the telecoms giant reached a pay settlement with the Communication Workers Union (CWU).

BT said it had reached an agreement with the union, which will be recommended to workers in a consultative ballot within the next couple of weeks. The company’s share rose 2.6 percent on the news.

Three Year Agreement

BT said that the two sides had failed to reach agreement on a one or two year deal, but described the three year agreement as an “unprecedented thirty nine month deal that will take both sides through until March 2013. This deal will provide BT with wage stability for several years.”

In total, the three year pay deal is a 9.3 percent increase to basic pay. Specifically, BT’s CWU staff will receive pensionable pay rises worth 3 percent each financial year from April 2010 to March 2013 with the rise being backdated to January 2010.

“The union had previously demanded a 5 percent rise for 2010/11 alone,” said BT.

BT had previously offered a 2 percent pensionable pay rise from April 2010 and a 3 percent rise from January 2011. The company had also offered lump sum payments worth up to £500 for each team member but these have now been removed given the revised terms over thirty nine months.

Fantastic Deal

“This agreement is good for BT, its employees, shareholders and customers,” said BT chief executive Ian Livingston. “BT will benefit from a long period of certainty whilst our employees will have financial stability during uncertain economic times. I am pleased that we have been able to work with the union’s leadership to resolve this matter as industrial action would have been in no-one’s interest.”

The union meanwhile described it as a “fantastic” deal and among the highest settlements anywhere in the UK.

“Following a very difficult set of negotiations and the first national ballot for strike action in BT since 1987 we’re delighted to have resolved this pay dispute through talks,” said CWU deputy general secretary Andy Kerr.

“This is a fantastic deal for our members providing a fair rise in their basic pay this year and for the following two years,” he added. “This deal is among the highest pay settlements in the country this year recognising the contribution of staff and BT’s success over the last year.”

“Although our ballot for strike action was ultimately withdrawn, we believe it played a major part in getting BT back to the negotiating table with a significantly improved pay offer,” Kerr said.

Industrial action was threatened last month, after the CWU announced it would send out ballot papers to more than 50,000 BT workers who are CWU members. This came after the union rejected an improved pay offer from BT, which was two percent this year followed by a three percent increase next year. The union was seeking a 5 percent pay rise, but BT said the strike would harm everyone.