Rolls-Royce will pay its 14,000 UK workers a one-off £2,000 payment in the latest sign of employers’ response to the cost of living crisis.
The British aero-engine group told staff on Monday that it would give 11,000 workshop workers and 3,000 junior managers a one-off cash payment. Shop floor workers will also receive a 4% pay rise through 2022, retroactive to March.
Rolls-Royce is one of the UK’s largest manufacturers, employing fewer than 20,000 people at factories across the country, including in Derby and Bristol.
Junior managers will receive bonuses in August, according to the proposal, first reported by Sky News. Once the proposal is accepted by the union Unite, the union members will receive it.
The company is one of the few employers that has decided to pay employees extra to help address rising food and energy costs in recent weeks. Lloyds announced this month that 64,000 staff would receive a £1,000 bonus.
Rolls-Royce chief executive Warren East outlined the proposal in a memo to employees, saying: “We are going through an extraordinary period of economic uncertainty driven primarily by the ongoing impact of the global pandemic and caused by the recent war in Ukraine.
“All of this affects each of us at home, at work and in our pockets.”
Easter went on to say that a “simple pay increase” was “just unaffordable and practically irresponsible”, adding that it would hurt the company’s “future competitiveness in the UK because it would increase too much” the long-term cost of regular payroll in times of such high uncertainty.”
The FTSE 100 company is paid by customers based on the number of hours flown in aircraft equipped with its engines. huge financial shock Flights grounded due to the coronavirus pandemic. It has cut thousands of jobs and has been forced to shore up its balance sheet with £7.3bn of new equity and debt in 2020.
The remuneration proposals will cost the company around £45m. Rolls-Royce told investors in February that it expected to be “moderately” cash positive this year, with analysts predicting it would generate 134 million pounds of free cash flow.
Rolls-Royce said the £2,000 one-off payment was to help its staff “go through the current exceptional economic climate”.
The company added that the 4 percent raise offered to shop floor employees is “the highest annual pay increase in at least a decade” and that, when combined with the cash amount, “these measures represent about a 9 percent raise for them”.