BT secured a reprieve from possible strike action by 50,000 of its employees yesterday after it raised legal questions that led the trade union to cancel its ballot.
The Communication Workers Union (CWU) was due to reveal the result of the vote in the afternoon, but instead announced its disappointment at calling off the vote. This followed a series of letters from the telecoms giant which amounted to a legal challenge, the union added.
The CWU deputy general secretary, Andy Kerr, said: "We are bitterly disappointed that this ballot has had to be cancelled. It is devastating for our members and for trade union rights in the UK and of course it doesn't help to resolve the outstanding issues over pay which we have with BT."
The vote, which followed a pay dispute between BT and its engineers and call-centre workers, was scrapped after the CWU revealed it had taken legal advice "which clearly outlined that under the notoriously restrictive trade union laws in the UK, certain technical breaches would potentially invalidate the ballot".
Mr Kerr added: "The legal technicalities on which this ballot has been cancelled again raise questions over the right to strike and the extremely restrictive trade union laws that exist in the UK. The law, in our view, appears to be outdated when it comes to the provision of information."
Last year, British Airways won a High Court injunction against the Unite union representing its cabin crew. The judge ruled in favour of the airline on a technicality.
Tony Woodley, the joint leader of Unite, said the ruling made it "all but impossible to take legally protected strike action against any employer who wishes to seek an injunction on even the most trivial grounds".
The CWU accepted the offer of further talks with BT yesterday, although it warned the company that it was "taking all necessary steps to allow a re-ballot as soon as practically possible if negotiations are unsuccessful".
This means BT has not yet overcome the possibility of its first national strike since 1987, should the two sides still fail to agree. A spokesman for the company said: "An amicable agreement is in everyone's interest and the withdrawal of the ballot provides both sides with a window of opportunity in which to reach such an argument."
BT offered a 2 per cent pay rise to CWU members this year, which the union promptly rejected. It came back with an offer of 5 per cent over two years, with a performance-related bonus. The CWU said it was "disappointed" with the offer and called for a pay rise of 5 per cent this year.
The union said the wage increases were justified after it supported pay freezes and cost-cutting that enabled the once loss-making telecoms giant to post a profit of £1bn last year.
After weeks of negotiations the two sides reached an impasse, and the union said it was left with "no other option" but to move for a vote on industrial action. It sent ballot papers to members on 18 June.
The strike could prove disastrous for BT, which has warned that it would result in job losses and customers deserting the company for other telecoms providers. Last month, one of BT's senior managers said a strike would derail the company's proposals for bringing superfast broadband internet access to two-thirds of the UK.
The group has pledged to extend its fibre-optic network out to more than four million homes this year, but Steve Robertson, the head of its Openreach division, said that target could now be dealt a severe blow.