Improved BT pay deal fails to head off ballot

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BT has moved to head off a potential strike by thousands of employees, with an improved pay offer, yet the trade union remained unimpressed, saying it would "press ahead with plans to ballot our members on industrial action".

BT, which tabled the revised offer last night, said it was "disappointed" with the union's response, but added that its door was open for further talks. The telecoms giant has been locked in a pay dispute with the Communication Workers Union (CWU), which represents between 50,000 and 60,000 BT employees including engineers, retail staff and call-centre workers. It first held a strike ballot of members last week.

BT is now offering a 2 per cent pay rise this year, followed by a further 3 per cent rise next year. It is also offering a £250 bonus and a further £250 in performance related pay. The previous offer was a one-year deal of a 2 per cent rise.

BT has also pledged not to make any voluntary redundancies until 2011 if staff accept the new terms. It also plans to bring call centre jobs and back office work back from India. Andy Kerr, the deputy general secretary of the CWU, said: "We're very disappointed that BT's revised offer remains materially unchanged for this year in terms of pay."

He said a 2 per cent reward was unacceptable and demanded 5 per cent this year. The union wants some redress for employees after the company cut costs by £1.75bn and reported profits of over £1bn. It said cost savings had come from BT cutting headcount by 35,000 over the past two financial years as well as freezing pay and changing the company's pension scheme.

The CWU added that yesterday's offer was "blatant double standards", citing the rise in remuneration to senior managers. It strongly criticised the chief executive, Ian Livingston, after it emerged he was to receive a basic salary of £850,000 and a £1.2m bonus.

BT has already come to terms with Prospect, which represents 30,000 of its employees. They voted in favour of the 2 per cent pay increase and bonus.