O2 have rolled out a new pay and reward structure for more than 1,900 employees in company-managed stores, following negotiations with the Communication Workers Union (CWU) and Telefonica.
The changes, which will make employees on average 2.3% better off, will not apply to those employees working in O2’s 180 franchise stores in the UK.
Bridget Lea (pictured), General Manager, O2 Stores has confirmed franchise staff will be excluded and said: ‘the way they are paid and incentivised is decided by each franchise owner.’ This gives rise to fears originally expressed by Andy Kerr, deputy general secretary of CWU in late 2012, that ‘two-tier elements threaten to undermine these workers’ conditions, while nominally working for O2.
Under the new agreement, which affects staff working in O2’s 290 direct stores, new starters receive a basic annual salary of £14,500 rising to £16,000 upon completion of a three-month probationary period. Staff will then be able to progress to £18,000, although the full details of qualifiers have not yet been disclosed.
The changes will see sales related bonus’s capped at 10% of salary (down from 20% and 25% previously) and Sunday working payments and ‘out of town’ premium payments of £400 scrapped. Bonuses included, employees will now be able to earn a maximum of £19,800 per annum.
Lea described the new system as ‘a service-led pay structure that empowers our people to have brilliant conversations with customers and deliver an even great customer experience’.
It also ‘encourages and rewards development, and recognises skills’ allowing O2 ‘to attract and retain the best people by providing them with a better framework to help them further develop their retail careers’, the company confirmed.
Union hails service-based approach
The CWU claims O2 increased pay because it was falling behind its competition. Sandra Walmsley, chair of the Telefonica team at the union, said: ‘Over the years, O2 has been resistant to the idea of pay increases, but they have recognised this time that pay scales compared to other companies were falling behind.’
She said the new scheme marks a shift away from a sales-driven culture towards a service-led approach, and came after pressure from members. It also allows members to ‘progress through the salary range to the maximum pay point’.
Walmsley said the changes came about as the result of a specific request by the CWU for Telefonica to review pay rates.
The deal has to be ratified by union member in a vote on 16 June. If agreed, the changes will take effect from 1 July.