Union Officials Grab Pounds 500,000 `Golden Goodbye'

Article excerpt

The ruling executive of Britain's biggest craft union have quietly awarded themselves massive severance packages potentially worth up to pounds 500,000 each, the Independent has learned.

In a decision so far hidden from its 700,000 members, executive councillors of the Amalgamated Engineering and Electrical Union have decided they can retire 10 years early on the equivalent of full pay. On leaving the union they will also be paid a lump sum of as much as pounds 50,000 and allowed to keep their Rover and BMW cars worth pounds 20,000- plus.

At 65 the former officials of the AEEU, one of the largest and most loyal Labour Party affiliates, will be allowed to draw a full pension. Given average life expectancy of around 73, the "hampers", as they are known in the executive's argot, could be worth up to pounds 500,000. The 10 years on full pay will be made up of payments from the pension fund topped up by the union's general account.

The revelation will be pounced on by the Tory high command as another example of Labour hypocrisy in the wake of union complaints over boardroom "fat cats".

While executive members are on relatively modest salaries of between pounds 40,000 and pounds 45,000 a year - in comparison with top company directors - the deal giving 10 years' full pay is unheard of for unions and highly unusual even among the most cosseted boardrooms. The Government-backed Greenbury committee on directors' remuneration recommended two years as a maximum.

One engineering union source said that the AEEU package amounted to a "rip-off". He said: "If these are hampers, we are talking Fortnum and Mason rather than Tesco picnic baskets."

Previous attempts by outsiders at calculating the value of the packages have woefully underestimated their worth.

The news will prompt a furious response from members, some of whom have already registered their dissatisfaction over the way the union is run.

The executive introduced the scheme in the wake of the merger which created the AEEU out of the old engineering and electrical unions.

It was decided initially that the two executive councils with 11 members each would amalgamate to form a 22-strong body. …