No deal struck over 2010 wage hike

Talks between ECA electrical employers and trade union Unite have ended without any changes to the 5% wage increase due to take effect in January 2010.

The ECA had hoped that the last part of the three-year deal, struck back in 2007, could be renegotiated, given the decline in the economic situation.

“We haven’t acceded to the employers’ request and the deal goes ahead,” said Tom Hardacre, national officer for construction and contracting at Unite.

Alex Meikle, head of employee relations at the ECA, said: “We had hoped to achieve something, given the extraordinary circumstances, but we reached an impasse.

“Given the choice of breaking the JIB wage agreement or honouring it, we have decided to accept it.”

The move has not gone down well with some struggling employers.

“The wage deal is simply untenable,” said Dave Kieft, director of RDM Electrical in Swansea. “We’ve been losing out on work because of the cost of labour. To stay competitive, we have reverted to 2008 wage levels. All staff, directors and site operatives have had the same cut.

“We put a number of options to staff and this was the one they chose. They would rather lose 5% or 7% of their wages than lose it all.”

Despite the bullish public stance over the 2010 increase, such local deals with operatives are unlikely to meet any resistance from Unite and the JIB. “People will do what they need to do to save jobs,” said Meikle.

Kieft feels that the ECA should have done more to force the issue. “I believe that, in the interests of survival, sometimes harsh and unpalatable decisions have to be made. This is how businesses survive in these times and the ECA should be party to assisting us, not hindering us with unhelpful wage agreements,” said Kieft.

Yet not all ECA companies were convinced that trying to change a promulgated JIB agreement was the right thing to do. Many major m&e firms will have been concerned about potential industrial relations issues on major sites.

Kieft is sufficiently incensed to be considering whether to cut ties with the ECA and JIB.

Diane Johnson of Eric Johnson of Northwich and vice-president of the ECA, said: “Nobody wants to be outside the JIB agreement but it is hard to be inside at the moment. If workloads do not pick up, we will have to reduce our labour costs. Clients will not accept a cost increase next January.”

The tacit approval of local wage deals by struggling employers raises the prospect of a national wage agreement that is unenforceable and a two-tier approach to wages in the sector: one for the major contractors and one for the SMEs.

All eyes will now be on the next round of pay talks due to start in spring 2010. Employers are likely to strive for a pay freeze in 2011.