In the latest corporate move to cut costs, British Airways has asked its 30,000 employees to work without wages for up to one month to improve the company’s financial standing.
Chief executive Willie Walsh has written an e-mail to all employees in which he asked they work unpaid in July, while he and chief financial officer Keith Williams have also agreed to forego one month of their own salaries.
“I am looking for every single part of the company to take part in some way, in this cash-effective way of helping the company’s survival plan,” he said.
“Many of you from across the airline are stepping up to help the company… It really counts.”
The airline has suffered during the downturn, having posted a record loss of $821.47 million for 2008, mainly due to pressures from higher oil prices. The company has also reduced its workforce by 2500 employees since March 2008.
Peter Vitali, principal of CCI Lawyers and SmartCompany legal expert, says the proposal is a creative one, but employers must tread carefully when asking for staff to take pay cuts.
“We’re seeing a lot of creative proposals from employers in the last six months or so to reduce wages bills, and we’re seeing things like reducing weeks to four days or whatever, and we’re seeing straight out pay cuts. In a sense this new move might seem a bit novel, but it’s a bit of a variation on the theme.”
Vitali says that if an employer wants to change the payment structure of some employees, those employees must consent before any changes are made.
“This is a proposal a little bit trickier than some of the others to implement. Of course BA will have ongoing minimum wage obligations you would think, so it’s a matter of documenting everything to make sure it doesn’t affect their compliance with their minimum obligations.”
“The reality is of course that the employee’s consent is needed in order to be able to implement this. If the staff says no, there’s not a lot they can do.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
