16 January 2010

Those pesky unions

An industry source has been quoted saying: "There really is no appetite to address Union power [in the rail industry]. The [pay] settlements continue to be well above inflation and the compound effect will be considerable. You have to ask whether fare payers or tax payers will pay for that in the future. Has the government thought about it?"

The quote formed part of an article that looked at the way in which the government and the big transport groups control each other and that while procedures are set in stone to ensure neither beast strays too far, nothing is done to 'control' the Unions' power.

National Express East Anglia ultimately offered its workforce a 3.5% pay rise recently, which was accepted, and it has been argued that in a recession, with the RPI being negative and the CPI being 1.9%, such 'inflation-busting' pay rises are a bad thing.

I showed the quote, and indeed the whole article, to a Union Chairman friend of mine whose response is worth quoting:

"The law surrounding Unions and any possible strike action is more punitive here in the UK than any other European country. As for NXEA employees being offered a pay rise 1.1% higher than the CPI recently, my response is clear: during the 'times of plenty', transport operators chose to generally offer below-inflation pay rises to their workforce, or offer rises linked to the CPI rather than the higher RPI, but now choose to disregard this by imposing pay freezes or cuts, opting to link the negative RPI. For every company like NXEA, who've seen a 1.1% above-CPI rise, there are at least 10 who saw a 1.1% below-inflation pay rise during the 'times of plenty."

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