Sectoral Pay Bargaining in the Energy Sector

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2019 Energy Service Group Conference
21 February 2019

Conference notes that energy workers are employed by many different private sector companies as a result of privatisation and fragmentation in the industry.

While privatisation has been good for senior executives and managers who have benefited from the industry profits generated, the same cannot be said for the majority of the workforce.

The gap between energy bosses and energy workers has continued to rise as it has for all major corporations. The High Pay Centre has calculated that the average pay of a FTSE 100 boss is now £4.35m a year – compared with £1.23m at the introduction of the minimum wage, an increase of 354%.

This year’s Fat Cat Day, the day when the average FTSE 100 chief executive will have already earned more than an average UK worker’s annual salary, took place on 4 January, earlier than last year.

While salaries of energy bosses like Iain Conn of Centrica and Alistair Phillip-Davies of SSE continue to rise, workers salaries struggle to keep pace with rises in the cost of living. UNSON welfare has seen a steady rise from members seeking assistance to pay for basics such as food and clothing.

It is also clear that excessive salaries amongst energy bosses are unrelated to performance as many energy companies have struggled to perform. This flies in the face of advice given by the CBI that ‘high pay should only be justified by outstanding performance’.

Conference therefore welcomes moves by the Labour Party to propose the introduction of sectoral collective bargaining for workers in the energy industry.

Such sectoral bargaining could harmonise pay and conditions for all workers carrying out similar work and ensure that the race to the bottom is halted and undercutting employers are stopped in their tracks.

Conference therefore calls on the SGE to;

1) Engage fully via UNISON’s Labour Link with the Labour Party’s energy policy team to develop a proposal for sectoral pay bargaining that is beneficial to the energy workers that UNISON represents;

2) Seek to ensure that any sectoral pay bargaining approach for energy workers, starts to close the gap between energy bosses and energy workers;

3) Work with the other energy trade unions to reach broad agreement on any future proposals and to ensure universal adoption of such arrangements, with zero tolerance for those who seek to avoid obligations;

4) Include pension arrangements in any sectoral bargaining agreements covering energy workers, so that all energy workers get access to good defined benefit pensions.