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Businesses 'are free to negotiate pay levels with staff'

Businesses should be free to negotiate pay levels with staff on an individual basis, one expert has said.

According to the Federation of Small Businesses (FSB), the government's decision to increase the minimum wage from 5.73 to 5.80 an hour could put many businesses under financial pressure.

The FSB advocates a system where employers would be able to talk to employees one-on-one, finding a deal that meets both parties' needs.

Carol Vorderman found herself subject of these kinds of talks with Channel4 bosses in the summer of 2008, when in a cost-cutting initiative she was asked to renegotiate her salary.

The mathematician was being paid 1 million a year to co-host afternoon quiz show Countdown, which she joined at the programme's launch in 1982.

Bosses wanted Vorderman to work for around a tenth of her then salary. As a result of the talks, the TV presenter quit.

One Channel4 source told The Mirror: "The advertising recession means that at the moment budgets are tight and cutbacks are being made.
"With Des [O'Conner] leaving as well, the two factors were too much for Carol and she just decided now was the right time to go.
"She can work fewer hours and earn more money elsewhere."

In light of the current recession, the Association of Convenience Stores (ACS) wrote to the Low Pay Commission urging for the minimum wage to be frozen.

The organisation argued that many firms will struggle to meet employees' wage expectations if the minimum wage is increased.

A survey by ACS revealed that just under three quarters of local shops felt the national minimum wage had impacted negatively on their competitiveness.

John Wright, national chairman of the FSB, said: "Businesses should be free to negotiate pay levels with staff individually according to what is affordable during these tough times, rather than keep up with a one-size-fits-all pay rise."

He added that while the minimum wage provides a better rate of pay for employees it could lead bosses to commission less hours for works, in a bid cut costs.

"The FSB is grateful the government has raised the minimum wage by only seven pence, but with 120 businesses closing a day and when many are struggling with cashflow, this is unfortunately another cost on employers," Mr Wright concluded.

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