Tram staff face wages freeze as project stalls

Published on Monday 16 August 2010 16:24

STAFF who work for tram firm TIE have been hit with a pay freeze and a ban on bonuses because of the lack of progress on the controversial project.

It emerged today that chief executive Richard Jeffrey had imposed the measures for the current financial year "to reflect the current status of the project".

He also revealed that he had paid out no bonuses to staff since taking office in April 2009.

The former Edinburgh Airport boss' decision to crack down on staff costs comes amid growing anger about the lack of progress on the tram project, which has been delayed by the ongoing dispute with the German contractor Bilfinger Berger.

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The move has been welcomed by councillors and business leaders, who say it reflects current economic conditions.

Mr Jeffrey, left, said: "Our staff work incredibly hard, have to deal with an inordinate amount of pressure at times and are under constant scrutiny from the public and media - so the decision was not made lightly.

"A pay freeze was instigated to reflect the current status of the project and our ability to fund any increase. I also felt this was in tune with the outside world."

The pay freeze at TIE comes at a time when local authority workers across Scotland were offered a one per cent pay rise - which they have rejected.

It covers the current financial year, which started in April 2010, and affects all 76 employees of the firm, including project managers, site supervisors administration staff and designers.

However, Mr Jeffrey refused to rule out pay rises and bonuses next year. He said: "To ensure we have the best people working on the project, we have to make certain the organisation remains competitive and bonuses are part of the package that we offer employees.

"The major factor affecting the decision not to award bonuses this year was the overall performance of the project in relation to the cost and time targets. This does not mean that no bonus will ever be achievable, and it's my belief that staff deserve, and are indeed entitled to, these bonuses if targets are reached."

It emerged earlier this month that TIE has spent 1.1 million on bonuses since December 2006, and 130,000 of the total was for staff who worked on the Edinburgh Airport Rail Link, despite the scheme never being delivered.

Councillor Andrew Burns, leader of the Labour group on the city council, said: "I certainly welcome the fact that TIE currently has a pay and bonus freeze in place.

"The Labour group proposed a similar pay freeze for council employees in our alternative budget last year but it was rejected by the coalition."

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "This has been done by and large by most businesses in the private sector. Everyone has talked about pay freezes or indeed significant reductions and that is not likely to change until there is an obvious upturn.

"In relation to TIE I suspect that it would be a surprise if it paid bonuses, albeit that I'm sure its staff are working hard."