Consignia chiefs in line for 10% pay rises

Ministers have sanctioned 10% pay rises for the chief executive and another director of Consignia, it has been confirmed.

The organisation, formally known as the Post Office group, faces the prospect of a national strike over plans to cut 30,000 jobs amid huge losses.

The Communications Workers Union has also asked for 5% and a weekly minimum of #300 by 2004 rise rather than the 2.8% currently on offer.

Managers are wielding the axe in a bid to shape up as Consignia faces the threat of compensation from private firms wanting to deliver mail.

But the rises for chief executive John Roberts and Jerry Cope, head of mail services, have been approved by the Department of Trade and Industry, a spokeswoman said.

The pay hikes, recommended by Consignia's remuneration committee, recognised the extra responsibilities they had taken on and the increase in fellow directors wages as the outfit strengthened its management team, she confirmed.

Consignia chairman Allan Leighton is angered by the deal, according to The Times.

He reportedly believes no one should take a pay rise while the organisation is facing such problems.

However, the only barrier to the pay rises is approval by the committee that recommended them in the first place.

The Consignia spokesman said Mr Roberts was paid #205,000 a year and Mr Cope #140,000 but he stressed the chief executive had had a pay freeze for a year.

He added: "This is to do with pay parity with other board members, although it has yet to be implemented."

The remuneration committee, made up of non-executive directors, would look at the pay awards at a future date, he said.

PA News

from The Times, 4.3.02
CONSIGNIA and the Government were at the centre of a "fat cat" storm last night after it emerged that the chief executive and another director of the troubled postal group are in line for 10 per cent pay rises.

The organisation – it used to be the Post Office group – is losing Pounds 1.5 million a day, is about to cut 30,000 jobs and faces a possible national strike over pay for postal workers. It is locked in pay talks with the Communication Workers' Union over its latest pay offer of 2.8 per cent; the CWU wants 5 per cent and minimum weekly pay of Pounds 300 by 2004.

The pay awards for John Roberts, chief executive, and Jerry Cope, the head of mail services, have angered the acting chairman, Allan Leighton, who believes that no one should have a pay rise during the group's current problems. They have not yet been implemented and Mr Leighton may try to block them, although the Department of Trade and Industry, which must sanction pay rises for Consignia board members, has supported them.

Mr Roberts earned Pounds 216,034, including benefits, last year, and Mr Cope Pounds 149,659. The two men are understood to be upset because other board members earn more than them. Marisa Cassioni, the finance director, earns a basic salary of Pounds 295,000, and David Mills, the new head of the Post Office Counters network, earns Pounds 250,000. Mr Leighton earns Pounds 20,000 a year for one day a month as a non-executive, although he is currently working one day a week. If the postal workers were to win a minimum weekly wage of Pounds 300 that would take their pay to Pounds 15,600 for a six-day week.

Billy Hayes, general secretary of the CWU, said: "If the DTI is prepared to support such inflation-busting deals, we trust that they will support ours."

John Keggie, the union's deputy general secretary, who has been leading the pay negotiations, said: "This is clearly double standards and will raise the temperature in the pay talks."

The union's executive will meet tomorrow to plan the next stage in its threat of strike action. It is also expected to react angrily to radical job cut plans that are expected to be unveiled in the next few weeks.

The pay proposals were attacked by Martin O'Neill, the Labour chairman of the Trade and Industry Select Committee. "It would appear that the normal rules of payment by results are being rewritten," he said. "However, it must take a fair degree of ingenuity to run a monopoly at a loss. Perhaps that is being rewarded."

Nigel Waterson, the Conservative spokesman on postal services, said: "It is bizarre to reward failure like this. It is insensitive and provocative for the Post Office workers while their pay negotiations are going on and also for the public who rely on the services."

Peter Carr, chairman of the postal consumers' group Postwatch, said: "It is extremely difficult to justify such pay increases when the service is so poor and they are losing Pounds 1 million a day. Consumers will be very surprised at this considering the standards of performance."

Consignia was last week forced to admit that it had missed all its service targets for the nine months from last April to December. The targets are set by the regulator and the organisation could face heavy fines if it does not improve service in the first three months of this year, a task that will be hard to achieve.

Consignia said that it would not discuss individuals' pay. The DTI said that it had backed the pay increase for Mr Roberts to reduce disparities after a recommendation from Consignia's remuneration committee and that Mr Cope's increase reflected an enhanced role.

The planned pay rises for the executives come as some other loss-making companies are freezing their managers' pay or cutting it to set an example. British Airways recently announced 10 per cent pay cuts for its managers.

It also emerged yesterday that Consignia, which last year lost Pounds 281 million in six months, had lost another Pounds 20 million on a failed venture with Sweden's CityMail company. Next month the postal group will face a fresh headache when the regulator is scheduled to deliver the final proposals for introducing competition into the postal market.

(c) Times Newspapers Ltd, 2002