Union rejects Rolls Royce £2,000 living-cost bonuson June 21, 2022 at 2:39 pm

A union representing Rolls Royce workers has rejected the offer of a £2,000 one-off payment offered by the firm to help staff with the rising cost of living.

Of the 14,000 staff at Rolls Royce who were eligible for the payment, 11,000 members are unionised.

The payment was intended for junior management and shop floor staff.

Unite said the offer “falls far short of the real cost of living challenges which our members are experiencing.”

The lump sum was due to begin being rolled out in August, starting with the 3,000 non-unionised staff before being paid to the remaining 11,000 unionised workers.

Unite’s regional secretary Paresh Patel the union was still in negotiations with Rolls Royce about the pay offer.

News of the pay offer emerged on Monday night, and was later confirmed by Rolls Royce.

However, Unite said: “The fact that Rolls Royce has made this announcement in the way that it has certainly in our view undermines the trade union and the negotiating position that should be between the employer and the unions on this matter.”

Rolls Royce had also offered workers a 4% increase in pay, back-dated to March. A Rolls Royce spokesperson had told the BBC it is “the highest annual pay rise for at least a decade” for its shop floor staff.

There are ongoing discussions with unions about a pay settlement for 2022-2023, the spokesperson said, and the cost of living issue is to be a factor in those negotiations.

Earlier this month Lloyds Bank announced measures to help staff cope with rising costs, as energy bills continue to soar and UK inflation hits a 40-year high of 9%.

Pay rates and measures to help UK staff have been increasing as businesses have been seeking to recruit and retain staff, after official figures showed that there were fewer unemployed people than job vacancies for the first time since records began.

Lloyds Bank staff were offered a £1,000 lump sum to help with rising costs, after Unite the Union demonstrated outside its annual general meeting last month.

It seems one-off cost of living payments are gaining in popularity among employers – but are they a short-term fix to a long-term issue?

The nature of inflation means that while the rate of price rises may slow next year, it is extremely unlikely that the cost of living will actually drop. Prices are almost certainly not going to fall.

Yet, these payments are not embedded in future wages, unlike a regular pay increase. As employees continue to find it tough, will there be pressure on bosses to make these payments a permanent part of pay next year and beyond?

There is undoubtedly an awareness among businesses that workers, particularly the lower-paid, need more financial help at the moment to cover their bills.

But perhaps this eye-catching tactic of one-off payments is directed more at another issue – the retention and recruitment of staff.

Inflation – the rate at which prices rise – currently stands at 9%, and is expected to increase again later this year.

Rolls Royce was badly impacted by the global coronavirus pandemic, which hit demand for its aircraft engines as international air travel ground to a halt.

In 2020 it announced plans to cut its global workforce by 9,000 by the end of this year, with 3,000 of those jobs going in the UK. At the time it said it would take “several years” for the industry to recover from the pandemic.

In the first year of Covid, Rolls Royce made a loss of £4bn because of the collapse in air travel, however it returned to profit in 2021.

In the company’s latest trading update, chief executive Warren East said the company’s financial performance had improved in 2021 and it had made “significant progress on the path to recovery from the impact of Covid-19”.

“We are confident that we have positioned the business to achieve positive profit and cash this year, driven by the benefits of our cost reductions and increased engine flying hours in civil aerospace together with a strong performance in defence and power systems,” he added.

Staff shortages are also putting pressure on firms to raise wages.

Earlier this month, Morrisons said it would increase pay for its store workers as UK supermarkets battle for staff in the face of increasing competition in the sector.

Rival chains Tesco, Sainsbury’s and Asda have also announced pay rises for their workers this year.