Postal Workers Suspend Strike Action

(Reuters) – POSTAL WORKERS said today they would suspend strike action until at least after Christmas under an interim agreement reached between unions and state-owned Royal Mail.

Brendan Barber, head of union umbrella group the TUC, told reporters that no definitive agreement had been reached to resolve a long-running row over jobs, pay and modernisation.

However, he said strike action had been suspended pending further efforts to settle the dispute and to prevent disruption of deliveries at the busiest time of the year.

‘The agreement provides for a period of calm, free of industrial action, to enable negotiations to be held over the next couple of months through to the end of the year to secure the longer-term agreements necessary on all aspects of modernisation of Royal Mail,’ Barber said.

‘The delivery of the terms of this agreement means that Royal Mail services will be free of any disruption up to and through the Christmas period,’ he said.

A third wave of national strikes was due to have taken place on Friday and Monday.

Business Secretary Peter Mandelson welcomed the news.

‘I hope very much indeed that we will not see further strikes,’ he told reporters.

‘I hope very much indeed that if there are issues that have got to be resolved, if there are wrinkles in the modernisation process, which is absolutely vital for Royal Mail, that these wrinkles will be smoothed out by discussion and negotiation without resorting to further strikes in the future.’

High Court Rejects Retirement Age Challenge

(Reuters) – THE HIGH COURT HAS REJECTED two charities’ legal challenge against the right of companies to force their employees to retire without any compensation at the age of 65.

Senior judge Nicholas Blake upheld the law that allows companies to dismiss staff without redundancy payments on their 65th birthday, although he said a government review next year could raise the retirement age.

‘I cannot presently see how 65 could remain as a DRA (default retirement age) after the review,’ he said on Friday, according to the Press Association.

Age Concern and Help the Aged, which brought the case, said that while the ruling was a ‘huge blow,’ they too hoped the government review would change the rules.

‘Today’s ruling does not spell the end of our campaign to win justice for older workers,’ said Andrew Harrop, head of public policy at the two charities. ‘We will be stepping up our fight to get this outdated legislation off the statute book.’

The fallout from the recession and higher life expectancy have reignited the debate over the correct retirement age and the treatment of older workers.

Although Britain’s retirement age is 65, companies do not have to impose it. Employers have a duty to consider requests from people to keep on working; but they can refuse them without giving any reason.

The charities brought the case against the government in 2006, arguing that the fixed retirement age broke European Union law and forced about 25,000 people each year to quit their jobs purely because of their age.

The Department for Business, Innovation and Skills welcomed the ruling and said it will form part of its review of the retirement age next year.

Trades Union Congress General Secretary Brendan Barber said the ruling will ‘allow employers to go on using an arbitrary retirement age as an excuse to weed out staff without having any obligation to compensate them or use fair processes.’

However, employment lawyer Jill Andrew, of Dawsons LLP, said many companies will be ‘breathing a sigh of relief.’

‘Employers rely heavily on the default retirement age to remove the older workers who they feel are no longer bringing value to the business,’ she said. ‘Removing the age bracket of 65 would give firms a major headache.’

Executive Pay Up In FTSE 100 Companies

(Press Association) – The pay of executives at the helm of Britain’s top companies rose 10% last year despite their organisations suffering huge losses on the stock market, it has emerged.

The full and part-time directors of the FTSE 100 companies took home more than £1bn between them last year, according to The Guardian’s annual survey of boardroom pay.

The directors’ salary increases were more than three times the 3.1% average pay rise for ordinary workers in the private sector and more than double the rate of inflation last year.

Their bumper pay hikes came at a time when many of their companies were imposing pay freezes and redundancies on staff in a bid to cut costs. The survey also revealed that the 10 most highly paid executives together earned £170m last year — up from £140m in 2007.

Liberal Democrat Treasury spokesman Vince Cable said: ‘The Guardian’s analysis shows the breathtaking cynicism involved in a lot of executive pay deals, which are unrelated to either personal or corporate performance and involve people who are very well off helping themselves to larger salaries when private sector wages in many companies are being cut.’

The increases in executives’ basic pay helped compensate for falls in bonuses related to the performance of their companies. Overall pay for directors of FTSE companies, including bonuses, fell by an average of 5%, with the average chief executive of a bluechip company now earning a basic salary of £791,000.

But taking into account bonus payments, share awards and the value of perks ranging from cars and drivers to school fees and dental work, the average pay package rises dramatically, the newspaper said. Nearly a quarter of FTSE chief executives received total 2008 pay packages worth more than £5m, and 22 directors now have basic salaries of more than £1m.

The highest paid boss last year was Bart Becht, chief executive of Reckitt Benckiser, who received £36.8m in pay, bonuses, perks and share incentive schemes.

Brendan Barber, general secretary of the TUC, said: ‘The recession has done nothing to stop the gap between top directors and the rest of their staff getting wider every year. It is even more offensive when the Institute of Directors has called for spending cuts that would hit pensioners, the poor and low-paid public sector staff.

“We’ve already had the 1980s-style recession, it looks depressingly like we are going back to 1980s greed-is-good politics too.’

Barber Warns Of Double-Dip Recession

(Reuters) – BRITAIN FACES A DOUBLE-DIP RECESSION if high government debt is tackled too soon through spending cuts, the Trades Union Congress said today.

There are signs Britain is emerging from a sharp recession; but big risks to recovery remain such as banks’ continued reluctance to lend, and the considerable fiscal tightening that lies ahead to reduce a ballooning public sector deficit.

With an election due by mid-2010, the focus has fallen on where any future government would aim spending cuts and tax rises.

The Conservatives, who are expected to concentrate on the public sector for much of the consolidation, are well ahead of Labour in opinion polls.

‘Public spending cuts will provoke a double-quick, double-dip recession,’ TUC chief Brendan Barber told reporters in Liverpool on the eve of the TUC’s annual conference, which brings together delegates from across Britain’s labour movement.

‘Unemployment could well exceed four million.’

Britain’s public sector borrowing is predicted to hit a record £175 billion this year due to the recession and extensive state life-support measures.

‘You can’t fight recession without making the short-term deficit bigger,’ Barber said. ‘Going for recovery is the best way to tackle the deficit in the long term.’

If they win the election, the Conservatives are expected to move swiftly to cut a deficit that they have warned could harm the pound and put Britain’s top grade credit rating at risk. Labour, which gets more than half its funding from unions, has said painful choices lie ahead but it is more likely to take a softer approach and will be more prepared to hike taxes.

Two opinion polls said on Sunday that voters trust the Conservatives with public services more than Labour.

Fearing their political soul-mate is on the verge of losing power, big Labour-affiliated unions came out in force today to urge their members to support Prime Minister Brown.

‘We can’t afford a Conservative government wrecking… the economy in a way that suits the rich and well-off but actually affects working people,’ Derek Simpson, joint general secretary of Britain’s biggest union Unite, told Sky News.

Brown, who held a meeting with unions on Friday and will address the TUC on Tuesday, will warn delegates the policies of a Conservative government would endanger the recovery. ‘We have to make tough choices in public spending,’ he will say, according to extracts from his speech. ‘Don’t risk your members’ jobs or the nation’s future with the Tories.’

Wage Deals Up Despite Low Inflation

(Press Association) – PAY RISES averaged 2% in recent months, suggesting wage deals were holding up despite low inflation, according to a new report.

A study of 74 agreements by the Labour Research Department (LRD) found that average settlements in the quarter to August had not changed since April.

One in five of the deals involved a pay freeze, showing that claims of an economic recovery were not breaking through into pay settlements, said the report.

Other surveys have reported that pay rises were averaging just 1%.

Lewis Emery, of LRD, said: ‘As in previous months this year, the three month figures to August show that pay is generally continuing to hold up despite inflation figures and despite the recession.

‘When the trend is downwards, long-term pay deals are still showing that they can deliver a good result both in the public and private sectors, and the consistent increases they provide are helping to give stability to the economy and to financial expectations for both employers and employees.’

TUC general secretary Brendan Barber commented: ‘This is undoubtedly a tough time for pay negotiations, but these figures show that pay freezes are the exception not the norm.

‘Successful organisations and organisations facing skills shortages still need to offer real pay increases and it’s to the credit of many unions and employers that they are sticking to the long-term deals they negotiated when things looked different.’

Record Rise In Jobless

(BBC) – UK UNEMPLOYMENT ROSE by a record 281,000 to 2.38 million in the three months to May, the Office for National Statistics has said.

The jobless rate increased to 7.6% — the highest in more than 10 years.

The number of people claiming unemployment benefit increased by 23,800 in June to 1.56 million, which was less than analysts had forecast.

Unemployment among young people has been especially acute, as firms cut jobs to reduce costs in the downturn.

Young people (those up to 24 years old) have been particularly hard hit with unemployment leaping to a 16-year high of 726,000.

The number of those out of work for more than a year rose by 46,000 to 528,000 — the highest for 11 years.

TUC general secretary Brendan Barber said: ‘It’s particularly worrying that over half a million unemployed people have been out of work for at least a year, including 133,000 young unemployed people.

‘With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger.’

Meanwhile, on Wednesday, a survey conducted by ComRes, on behalf of the BBC, showed two-thirds of people across the UK know someone who has lost a job in the recession. And a further four in 10 fear losing their job in the current climate.

… (20/07/2009) – One Million Forced To Work Part-Time

… (22/07/2009) – Pubs Closing At ‘Record Rate’

TUC Warns Against Spending Cuts

(Press Association) – CUTTING PUBLIC SECTOR SPENDING in health and education would cost tens of thousands of jobs, including a ‘significant’ number in private companies, the TUC has warned.

The union umbrella group said 200,000 public sector jobs would be lost if spending was slashed by 10% and warned the private sector would also be badly affected.

Public spending had increased by £174 billion in the decade to 2007/8, leading to an extra 570,000 jobs, heavily concentrated in education and health, said the report.

Cutting spending on health and education was bound to have an impact on private sector contractors selling goods and services to the public sector, it was argued.

TUC general secretary, Brendan Barber, said: ‘A mania has gripped otherwise sensible commentators who are calling for deep cuts in public spending to reduce the budget deficit.

‘They talk as if these cuts would have no effect on the private sector or the wider economy, and that health, education, and front-line services would hardly notice; but this is a delusion.

‘Cuts in public spending would inevitably hit the private sector. More money is spent on buying goods and services from private companies than on the public sector pay bill. As health and education are such significant parts of the public sector, and have been the overwhelming beneficiaries of higher spending in the last decade, no deep cuts package could spare them.’

Mr Barber said cuts in public spending now would ‘choke off’ any recovery from the recession, adding: ‘Not only would a 10% cut in public spending directly cause public servants to join the dole queue; but it would also hit the private sector hard as both the state, and workers who have got the sack, stop buying its goods and services.

‘The net result of this would be to plunge the economy into a further downturn that would make the deficit even worse as the tax take further falls and jobless benefit bills increase.

‘When companies and individuals stop spending, the only way to avoid a slump is for the state to fill the gap. The best way to close the deficit is to go for growth and increase the tax take from the super-rich who have done so well from the boom years.’

… (17/07/2009) – IMF Warns Britain’s Soaring Debt Is ‘Testing The Limit’