The winter of the National Grid’s discontent: Unions baulk at 7.2 per cent

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The National Grid faces industrial action over pay by nearly one-quarter of its 10,500 workers in January, historically the coldest month of the year.

Unison and Prospect, two of the four unions that represent the FTSE 100 group's British employees, wrote to its chief executive, Steve Holliday, last week warning that a ballot for industrial action will start over the next few days. Union members will vote on whether to work-to-rule and refuse overtime that is vital during the month when electricity infrastructure is most susceptible to shutdowns.

A third union, Unite, is expected to send a letter next week, and might go further, balloting for a strike. The final and smallest union, with around 400 of the employees, the GMB, will not hold a ballot but has demanded that National Grid return to the negotiating table.

National Grid, which has had a poor industrial relations record in recent years, has offered the 2,500 staff, who are largely in supervisory and control-centre roles, a 7.2 per cent pay increase over three years. Field engineers have separate pay bargaining negotiations, but would struggle to do their jobs without direction and updates from control centres. A union source said: "This will have a significant impact. There could be lots of electricity lines down and the control room needs to monitor the situation."

Mike Jeram, Unison's head of business who wrote to Mr Holliday on Monday, said: "Our members are disappointed with the company's attitude towards them. They have worked hard in difficult weather conditions to deliver good profits and don't feel they are being fairly treated."

Mr Jeram said that the central issue was that the pay deal did not protect against inflation. A union source added that a three-year deal meant that the pay would rule out any benefits of a potential economic upturn, should such a trend occur before 2014.

A National Grid spokesman said: "Given the current economic climate, we believe the pay deal offered by the company is a fair deal which gives employees far more security and stability over the next three years than would be offered by a single-year pay deal." The company also said that it rewards high-performing staff with 2 to 3 per cent increases every year as well as a bonus scheme that averaged 2 to 2.33 per cent this year.

National Grid, which delivers gas to 11m homes and businesses in the UK, saw its stock close at 554p on Friday, down 5p on start of the day's trading. Last year, Unite voted fro wto one-day strikes, but a deal settled the dispute before they walked out.