Pay talks stalled over bonus row - Groundbreaking four year deal hangs in the balance as unions reject clawbacks

The prospect of a four-year pay agreement for construction employees being agreed at tomorrow's "final" negotiating meeting looks slim.

With five major issues still to be resolved, the unions are digging their heels in. Their biggest worry is that the employers want "bonus clawbacks" which could reduce the benefit of the award to 24-25 per cent over the same period.

A spokesman for trade union Ucatt said: "We've had half-a-dozen meetings with employers over the past six weeks. While we are getting to the last stages of the negotiations now, there is still a lot of bargaining to be done. It would be premature to expect a settlement on Thursday."

The industry's annual pay review has taken on major significance this year.

First, there is an attempt to introduce a single deal covering both the building and civils sectors; previously they each had their own arrangements.

Secondly, the employers want to introduce a pay and conditions package covering a period of four years.

The agreement will cover 600,000 employees, more than half the industry's workforce. The number of construction employees has risen by 100,000 in the past two months as a result of the Inland Revenue's crackdown on the bogus self-employed, a pressure that is expected to result in a total of 200,000 taking on employed status by the time the "crossover" process is complete.

The headline figures in the proposed deal are a 45 per cent pay hike for skilled craft workers, representing two-thirds of builders, with unskilled staff looking at a more modest figure of 28 per cent.

But the Ucatt spokesman said: "These figures are before bonus clawback and we're not happy with it. In the third and fourth year the hourly rate for skilled craftsmen would go up but a percentage of the bonus could be clawed back to cover increases in the basic rate.

"The same applies to the 28 per cent for unskilled operatives: there is clawback there too. We had bonus clawbacks once before and there were problems in the implementation. Basically, we're not keen on it."