BT faces strike action over pay offer

Telecoms giant BT was tonight facing the first national strike by its staff in more than 20 years after being given a deadline to improve a pay offer.

The Communication Workers Union (CWU) said it will ballot up to 60,000 of its members for industrial action unless a 2% offer is increased by June 4.

The decision by the union's national conference in Bournemouth was made just after BT announced its chief executive received a bonus of £1.2 million last year on top of a salary of £860,000.

Ian Livingston hit 142 out of a maximum 200 targets set by the company, giving him a £1.2 million bonus out of a possible £1.7 million.

Mr Livingston was given a £50,000 pay rise last year, which would have taken his salary to £900,000, but he did not accept it at a time when BT froze the pay of staff, so it was postponed to this year.

He is accepting a 2% rise on his £850,000 salary rather than 2% of the extra £50,000, which means he is taking around £17,000 and donating approximately £34,000 to charity.

Three other directors received bonuses totalling more than £1.5 million, including Hanif Lalani (£503,000), who left BT in January.

Andy Kerr, the union's deputy general secretary, said: "This is about fairness. We don't mind senior executives getting bonuses, but we want all staff to share in the success of the company.

"Staff have borne the brunt of the cost savings and have delivered the profits but are being treated as a second-thought.

"BT can afford a decent pay rise for staff this year, there's no doubt about that. Their profits are extremely healthy and free cash flow is almost double the forecasts at £1.9 billion.

"With a pay-freeze last year and inflation now running at 5.3%, BT's attitude to pay is insulting and the staff deserve more.

"Strike action is clearly a last resort. We've not had a national strike in BT since 1987 so this is not something we take lightly. We hope the company will return to negotiations and avoid the need for any strike action."

A BT spokesman added: "We are disappointed by the CWU's decision to call a ballot but our door remains open. It is in no-one's interest for industrial action to take place and we have written to the union this week to say we remain willing to meet with them.

"Our final offer is fair, realistic and more generous than those they have accepted elsewhere. This offer could see their lowest paid members receive up to 5.4% in pay and bonuses with some thousands of staff also enjoying a second pay rise in October."

Delegates at the Bournemouth conference backed a motion that said the union was "appalled" at BT's failure to "adequately reward" workers. The union is seeking a 5% pay rise.

If the ballot goes ahead, the union will plan a programme of action designed to have maximum impact on BT, the union said.

Former Labour minister Patricia Hewitt, who is a BT director, was paid £128,000 in the last financial year, today's financial figures revealed.

Ms Hewitt attended eight board meetings during the year, out of a possible nine, six audit committee meetings, two nominating committee meetings and four meetings of the remuneration committee, which she chairs.

The former Trade and Industry Secretary was appointed Senior Independent Director of BT last July and has total annual fees of £150,000.

She also has more than 10,000 shares in the company, while Mr Livingston has more than a million shares, according to the report.

Gavin Patterson, who was appointed chief executive of BT Retail in June 2008, received a bonus of £487,000, and Tony Chanmugam, who was appointed group finance director of BT Group in December of the same year, received £463,000.

Mr Lalani was a former finance director who ran BT Global Services for 15 months in order to sort out problems caused by its previous boss.

BT said almost 30,000 staff will get bonuses because of the "significant progress" made by the company and because of its link between pay and performance.

The firm said its executive pay levels were set below the median for comparable positions at other companies so that they had their remuneration closely tied to performance.

Mr Lalani was entitled to a year's pay after leaving according to the terms of his contract.