Home / News / World /  British labour union rejects this company's over 1 lakh 'bonus'. Here's why
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British luxury car and aero-engine manufacturer became the latest company to offer a over 1 lakh to its employees as extra cash to offset the rise in the cost of living. 

The offer was made to almost 70% of their workforce to help them steer through the rising living costs, Sky News confirmed. 

The offer was to be made available for 14,000 employees on the shop floor and in junior management, with the former group also getting the highest annual pay rise in at least a decade, said a Rolls-Royce spokesperson. 

However, the highly unionised manufacturing industry in Britain saw Labor union Unite reject the coveted offer citing the fact that it fell short of expectations. 

"The revised offer still falls a long way short of the cost of living crisis claim submitted by our members and their expectations. Unite senior reps are in discussions to decide next steps," a Unite union spokesperson said via email.

UK manufacturing remains highly unionised and staff shortages and high levels of inflation have enabled workers to push for bigger wage increases than normal.

The UK aero-engine group said that it would give the cash lump sum to 11,000 shop-floor workers as well as 3,000 junior managers.

In an emailed statement to Reuters, a Rolls-Royce spokesperson said the company was also offering a 4% pay raise back-dated to March to 11,000 UK shop-floor workers.

The company added it was the first time it was offering a "bonus" that was linked to the economic climate and not performance.

Rolls-Royce said 3,000 workers would receive the cash in August, while the other 11,000 would get the amount when the deal was approved by the union.

The move comes days after British Prime Minister Boris Johnson warned that a sharp hike in wages would risk fuelling further price rises, adding that increasing pay to match inflation risked a wage-price spiral.

The British economy suffered a blow during the global coronavirus pandemic that brought the world to a standstill for almost two years. The economy later faced an a rebound initially.

It is now battling high living costs worsened by a combination of labour shortages, supply-chain snags, post-Brexit trade problems and the war in Ukraine.

Shares of the London-listed firm closed 0.7% lower at 90.83 pence.

Planemaker Airbus SE reached a deal with its UK union in April after several rounds of talks, agreeing an 8.6% raise over 13 months, a lump sum payment and additional holiday.

Other industries face similar pressures, with Lloyds Banking Group Plc offering its staff a one-time 1,000 pounds following labor group demonstrations outside its annual investor meeting.

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