Union officials grab pounds 500,000 `golden goodbye'

The ruling executive of Britain's biggest craft union have quietly awarded themselves massive severance packages potentially worth up to pounds 500,000 each, the Independent has learned.

In a decision so far hidden from its 700,000 members, executive councillors of the Amalgamated Engineering and Electrical Union have decided they can retire 10 years early on the equivalent of full pay. On leaving the union they will also be paid a lump sum of as much as pounds 50,000 and allowed to keep their Rover and BMW cars worth pounds 20,000- plus.

At 65 the former officials of the AEEU, one of the largest and most loyal Labour Party affiliates, will be allowed to draw a full pension. Given average life expectancy of around 73, the "hampers", as they are known in the executive's argot, could be worth up to pounds 500,000. The 10 years on full pay will be made up of payments from the pension fund topped up by the union's general account.

The revelation will be pounced on by the Tory high command as another example of Labour hypocrisy in the wake of union complaints over boardroom "fat cats".

While executive members are on relatively modest salaries of between pounds 40,000 and pounds 45,000 a year - in comparison with top company directors - the deal giving 10 years' full pay is unheard of for unions and highly unusual even among the most cosseted boardrooms. The Government-backed Greenbury committee on directors' remuneration recommended two years as a maximum.

One engineering union source said that the AEEU package amounted to a "rip-off". He said: "If these are hampers, we are talking Fortnum and Mason rather than Tesco picnic baskets."

Previous attempts by outsiders at calculating the value of the packages have woefully underestimated their worth.

The news will prompt a furious response from members, some of whom have already registered their dissatisfaction over the way the union is run.

The executive introduced the scheme in the wake of the merger which created the AEEU out of the old engineering and electrical unions.

It was decided initially that the two executive councils with 11 members each would amalgamate to form a 22-strong body. It was envisaged that the new group would slim down to nine after regional elections under the auspices of the new merged organisation.

The leadership hit on the "golden goodbye" idea so that members of the old executives could be eased out in comfort. The only present council member who is "unhampered", is Davey Hall, the president who took up his post in January some two years after the early retirement package was agreed.

Mr Hall, a former shipyard electrician, said yesterday: "The executive council is aware of my position and my disagreement with the proposed method of reducing the numbers." Supporters of the president claim that other prominent figures in the organisation have sought to ostracise him.

Some senior AEEU figures have already left the union since the introduction of the severance terms: Sir Gavin Laird, the former general secretary, and other engineering representatives, Cliff Dawber and Tom MacLean. Former members of the electricians' union executive who have gone under the scheme are Pat O'Hanlon, Harry Hughes and Lew Britz. All of them were 60 or older so were unable to avail themselves of the full 10 years on full pay, but they received packages which could have been worth up to pounds 250,000. Younger colleagues who opt to retire stand to receive twice as much.

Ken Jackson, who took over as general secretary last year, said Jimmy Airlie, who represents Scotland, and Bill Morgan of the Midlands, intend to go within the next 12 months when they are 60. Last week the executive blocked the election of Mr Airlie's replacement on the grounds that they were still trying to cut numbers to nine, although critics point out that this will leave the union with no Scottish executive members.

Mr Jackson said that details would be published soon in the annual report. The idea was to reduce the executive before holding fresh elections. There was no intention to keep the arrangement quiet.

"Details are going to be published as soon as the auditor has approved the annual report," he said. Mr Jackson added that the union would save "millions of pounds" on office costs and expenses by reducing the 22-strong executive to 9.