Pay freezes hold rise in settlements to 2%

The latest figures from Labour Research Department’s Payline database of collective agreements show a median (midpoint) increase in the three months to December 2009 of 2.0%. The median increase in the private sector was 1.9%, but in the public sector it was 3.3%.

Manufacturing posted a 1.5% rise, while in services the rise was also 2.0%.

There is evidence from the database that pay freezes are still on the agenda for 2010. Some employees will undoubtedly benefit from inflation-linked pay rises, but many will be going without a pay rise this year, in some cases for the second year running.

Freezes still account for around a quarter of all settlements (a third excluding existing long-term deals), and are contributing to a pay mid-point that remains at or slightly below its recent 2% trend (1.2% excluding existing long-term deals).

Nevertheless, the latest set of settlements includes many around the 2% mark, such as Aegis Security, The Seafood Company (Macraes) and Engineering Construction.

The LRD figure of 2.0% is higher than two other pay research orgnaisations. According to IRS, headline award stood at 1.2% in the three months to December — down from 1.3% in the three months to November. Incomes Data Services latest figure was a 1.6% rise in the three months to November.

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