Two directors of Consignia, the U.K. postal service, have declined to accept an annual 10% salary increase, citing the “perilous state” of the firm ‘s finances.
Consignia, the privatized successor to Royal Mail, reported in November that its operating losses had grown to $1.5 billion from $30 million in the first six months of the year, according to news reports.
CEO John Roberts and mail services group managing director Jerry Cope would not take the salary increases — proposed by the U.K. Department of Trade and Industry (DTI)– “at this time.”
Meanwhile, the Communication Workers Union (CWU) of more than 145,000 British postal workers has been planning a possible strike this week if “no significant progress” is made in its pay dispute with Consignia. No date has been set for a strike.
“The debate over levels of pay within Consignia is legitimate but our priority is the pay of postmen and women,” Roberts said in a statement. “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.”
Under the DTI’s original proposal, Roberts’ salary would have gone up from about $324,000 to $356,500. Cope had been in line for a hike to about $249,400 from $224,500.
The CWU applauded Consignia’s move.
“Considering the difficulty we have had in getting the business to consider a 5% pay rise for postal workers, the announcement of 10% increases in boss’ pay was insensitive and very poorly timed,” said John Keggie, the unions’ deputy general secretary, in a statement. “We are glad to see that Mr. Roberts and Mr. Cope have shown some restraint in turning down these huge hikes in pay. However, instead of rewarding managers for failure it is high tine the business rewarded its foot soldiers for their efforts.”
The CWU is seeking a 20% pay rise over the next two years, taking workers’ basic earnings to 300 pounds ($423) a week. So far, Consignia has offered 2% to 2.5%.
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