Information released by STE Head Office Wednesday 22 April 1998.

The key elements of the package are:

• An increase to the MPG paybill of £16.5m (covering the period 1 June to 31 March 1999) for consolidated salary increases at 1 June 1998. This equates to £19.8m for the full year June to May 1999. Although the company did not talk in percentage terms this year, the STE estimates this to be around 3.8% of the MPG paybill.
   
• In return for the STE's support BT has also agreed to pay a consolidated salary increase of £150 per annum for all MPGs employed on 1 April 1999, paid in April 1999 salaries.
   
• Combining the June 1998 and April 1999 increases we estimate will add around 4.2% to the outgoing rates.

In addition to the above, we have also secured commitments for the following:

• A review of MPG pay range minima and maxima to take place in September 1998 with any resultant changes taking effect from 1 April 1999.
   
• A review of MPG pay related allowances with any changes taking place from 1 April 1999.
   
• Early talks on how BT will meet its on-going commitment to letting people know the level of performance and competencies achievement that will be required to progress to particular reference points in the salary range.
   
• Discussions with the divisions on their approach to MPG pay this year.
   
• Early talks on the redefinition of BT's Equal Pay policy statement.

The major driver for BT this year was affordability. However, during the discussions the STE did manage to secure an increase in the amount of money available for the review together with an increase of £150pa for all MPGs from 1 April 1999.

Our support for the review is conditional on progress towards resolving our outstanding concerns over the coming months and in future MPG pay reviews.

The prime focus for the 1 June salary increases will be people who

• are below the midpoint of the range
   
• are marked Category 1 or 2 in their current APR and are already paid above the midpoint of the pay range or
   
• work in scarce skill areas, such as software, mobile and other hi-tech sectors where external market pressure is exceptional.

Whilst the prime focus will be on people in the above categories, other MPGs will have their pay reviewed in line with BT's pay principles.

During the discussions the STE was concerned that the money available would be insufficient to provide a real increase in salary for all MPGs, together with an appropriate level of reward for performance and adequate progression through the pay ranges. We remain concerned that the money available could result in some people above the midpoint getting no increase. We pressed very hard for a company-wide minimum payment to be paid in June for all MPGs appraised as 'good' or better. This would have been in addition to the £150pa for all MPGs which will be paid in April 1999. BT were unwilling to give this commitment. However, this is an important issue which we will continue to pursue at all levels within the company.