Union toasts inflation-link pay deal with drinks firm

Diageo: Sales up by three per cent thanks to whisky strategy. Picture: Dan Phillips
Diageo: Sales up by three per cent thanks to whisky strategy. Picture: Dan Phillips
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DRINKS giant Diageo today hailed a “ground-breaking” pay and conditions deal which has been agreed with more than 1,000 manufacturing employees in Scotland.

The agreement with GMB union members provides an annual inflation-linked pay increase and a rolling guarantee of three years job security if there is significant change in the part of the business in which an employee works. Workers will also have an opportunity to earn a quarterly bonus, based on salaries, of up to 3 per cent.

Under the agreement, employees “will ensure that service to markets is maintained at all times” although the company stressed that did not represent a no-strike deal.

Brian Higgs, Diageo’s director of malt distilling, said the agreement gave staff a direct stake in the success of the company.

“Our business is doing well and we want our people to share in the rewards of that and also to make sure we are all working together in partnership to ensure we achieve event greater success in the future,” he said.

GMB regional secretary Harry Donaldson said the deal provided a level of job security and income stability which was “certainly uncommon in Scotland or indeed the UK”.

Diageo’s non-union manufacturing employees have been offered the same as GMB members. The agreement comes three years after the high-profile dispute between unions and Diageo over plans to shut its operations in Kilmarnock as part of its restructuring process in Scotland.

Meanwhile, Diageo yesterday said it expects its double-digit annual growth in Africa to accelerate helped by a strong rise in Johnnie Walker and Smirnoff spirit sales. Africa is the firm’s biggest emerging market region and provides 14 per cent of group sales. The region has seen average annual sales rise by 15 per cent over the past five years.