DEFENCE firm QinetiQ has reached a deal with union members to alter redundancy rights in exchange for a 3.5 per cent pay rise, the company announced yesterday.
Around three quarters of the 6,500-strong workforce voted in favour of the deal, in which redundancy pay will be capped at four weeks’ pay per year of service up to £90,000, or 15 years’ benefit, down from the current rate of eight weeks per year for a maximum of 20 years.
The deal applies to employees who worked for the firm before it was privatised in 2001, and who signed generous civil service employment contracts.
QinetiQ chief executive Leo Quinn said: “This result is a credit to our people in understanding the increasingly competitive nature of our markets.”
A spokesperson for the Prospect union, which represents 1,800 staff at the Hampshire-based firm, told City A.M.: “The agreement is not an endorsement of the new terms; it’s simply an acceptance of current circumstances.”
He also said the deal “sharply contrasts” with the £1.1m severance payment former chief executive Graham Love received last November.
The aerospace and defence company suspended its dividend for 12 months in May as it launched a two-year program to restructure and reposition the business.
The firm has said up to 1,000 jobs could be lost in the restructure, which follows two profit alerts in recent months as the firm was hit by spending cuts within the UK military.