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Union says Rolls-Royce will furlough UK workers on full pay

Tom Belger
Finance and policy reporter
The Rolls Royce XWB engine assembly line at the Rolls-Royce's aero engine factory in Derby. (PA)

Thousands of Rolls-Royce (RR.L) workers are set to be furloughed on full pay, according to trade union officials.

The Unite union said it had reached a deal with the engineering giant on terms and conditions for staff with production scaled back during the coronavirus pandemic. The announcement has not been publicly confirmed by the company.

The company’s whole workforce are set for a 10% temporary pay cut for a year, with staff pay packets topped up by the same amount during the next financial year from April 2021, according to Unite.

The union also said workers not required would be given three weeks’ paid leave through the government’s coronavirus job retention scheme. The Treasury foots the bill for 80% of wages up to £2,500 a month, but Unite said the employer would top up the remainder.

Read more: 11 million UK workers could be furloughed by firms

“Talks are ongoing as to what happens after the end of the month,” said the union in a press release.

Unite also said up to 60% of the 12,000-strong workforce at Rolls-Royce’s Derby plant, which closed last week, could be back in work soon on a rotating shift system.

Unite regional officer Tony Tinley said reps had worked on a “stringent health and safety regime” including a one-way system to keep staff safe.

Airplanes are still flying bringing in medicines and other supplies, so there is a current demand for Rolls-Royce’s superb products,” added Tinley.

 “What we have achieved at Rolls-Royce is a template that other companies could follow in terms of workers’ incomes and safety protections.”

Read more: Firms stop hiring at fastest pace since financial crisis in 2009

The engine maker had already announced earlier this week it planned to cut its wage bill by 10%, but did not reference any plan to repay the wages later. It also said on Monday its board would take a 20% pay cut, external hiring would be frozen and its dividend would be suspended for the first time since 1987.

Its revenue from airline customers, based on flight levels, has taken a £300m hit from the pandemic, as air traffic has plummeted around the world.

But the cost-cutting measures an company’s progress addressing problems with its Trent 1000 engines appeared to reassure investors on Monday, sending its shares higher.

The company has major plants in Bristol, Glasgow and Barnoldswick in Lancashire as well as Derby.

Rolls-Royce has been approached for comment.