Politics

Rolls-Royce Pays Workers Cash Bonus As Cost of Living Crisis Deepens

  • Rolls-Royce is giving 14,000 staff cash bonuses to help them cope with rising living costs. 
  • 11,000 factory staff and 3,000 junior managers will be given £2,000 ($2,459), the company confirmed.
  • Factory staff will also receive a 4% back-dated pay rise, equivalent to a 9% pay increase. 

Rolls-Royce, the iconic British engine-maker, is giving 14,000 workers the equivalent of almost $2,500 in cash to help cope with the surging cost of living, with 11,000 also getting a backdated pay rise.

Workers were told on Monday that the firm plans to provide a cash sum of £2,000 ($2,459) to 11,000 shop floor workers, and 3,000 junior managers.

Shop floor staff, who are represented by a union, have been offered a 4% pay rise on top of the bonus, backdated to March this year, as first reported by Sky News. Rolls-Royce later confirmed the news to Insider through a company spokesperson. 

The bonus and salary increase combined would equate to a 9% pay rise for the 11,000 shop floor workers, the company told Insider.

“We are living through exceptional times, with economic uncertainty largely driven by the continuing impact of the global pandemic and more recently the war in Ukraine,” CEO Warren East told staff in a memo, seen by the Financial Times.

“All of this is impacting each of us at home, at work and in our pockets,” he added. 

Rolls-Royce’s spokesperson told Insider this is the first time the company has ever offered a cash sum related to the economic climate, rather than performance. 

On Wednesday, a spokesperson for Unite — the union representing Rolls-Royce shop floor workers — said the union has rejected the offer on the grounds that it “falls far short of the real cost of living challenge,” per the BBC. The union is still in negotiations with Rolls-Royce, a spokesperson told the BBC. 

Rolls-Royce joins a growing number of firms offering to support workers as rampant inflation, accelerated by the war in Ukraine, causes the cost of living, fuel, and food to surge globally.

US inflation rose to 8.6% in the year to May 2022, while in the UK, the latest official figures show inflation at 9.1% in the 12 months to May 2022. 

Pay in both nations has lagged behind price rises, increasing to 4.8% for US private sector employees in the year to March 2022, and 8% between February and April for UK employees

In the memo, East said that given the current climate a “simple wage increase” is not affordable and would be irresponsible as it could damage the “future competitiveness of the company by adding too much cost into the long-term wage bill at times of such high uncertainty,” according to the FT. 

Junior managers will receive their pay rise in August this year, while shop floor workers get theirs once it is agreed with their union, Unite, the company said. 

Rolls-Royce, which is separate from the car manufacturer of the same name, employs 20,000 people in the UK. Its income is heavily reliant on the production of aviation engines for the likes of Boeing. As a result, the company had to make thousands of workers redundant during the pandemic as global travel ground to a halt.



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