Post chiefs turn down pay rise

Consignia has rejected union pay demands

Two senior directors of the troubled postal giant Consignia have decided not to accept a 10% pay rise.

The pay increases for the company's chief executive and head of mail services had been backed by the Department of Trade & Industry, even though Consignia is making huge losses.

The decision to award the pay rises was attacked by union leaders. Consignia is currently facing a national strike by workers over pay.

There could be no justification for a 10% increase to bosses when workers are offered only 2% and are threatening national strikes

Peter Carr, Postwatch

The Communication Workers Union (CWU), which is fighting for a 5% pay rise for postal workers, had accused the company of "double standards".

Consignia in 'perilous state'

Ten percent pay rises were recommended for Consignia chief executive John Roberts and head of mail services Jerry Cope.

But in a statement Mr Roberts said they had decided not to accept the pay increases "at this time".

"The debate over levels of pay within Consignia is legitimate but our priority is the pay of postmen and women," Mr Roberts said.

"The business is in a perilous state and the key issue for all of us is affordability. We will address all these issues when the company can afford it, not before," he added.

Peter Carr, chairman of the postal consumers' group Postwatch, welcomed the move.

"This is sensible decision from an eminently sensible man," he said.

"There could be no justification for a 10% increase to bosses when workers are offered only 2% and are threatening national strikes."

'Insensitive' move

A DTI spokesman had earlier confirmed the department supported the decision following a recommendation from the company's non-executive remuneration committee.

Martin O'Neill, the Labour chairman of the influential Commons Trade & Industry committee, said: "I think it's extraordinarily insensitive at this point when the workers - the bulk of whom are extremely poorly paid - are in the middle of delicate wage negotiations."

Peter Skyte from the Amicus union which represents 15,000 postal workers described the timing as "crass."

Consignia, which runs Royal Mail and was formerly known as the Post Office, is undergoing a cost cutting programme - putting up to 30,000 jobs on the line.

A company spokesman said it had warned the DTI that this was a sensitive time to make the announcement.

He said the pay rises were recommended because two recently appointed members of the company's executive board had been earning more than the chief executive.

He said Mr Roberts earned a basic salary of £205,000, while Mr Cope received £140,000.

The average pay of a postal worker is £250 a week.

The CWU, which wants a weekly minimum of £300 for postal workers by 2004, has rejected Consignia's offer of a 2.8% pay rise.