Telekom Austria agrees pay deal with Austrian staff

VIENNA Tue Jan 21, 2014 4:40am EST

VIENNA Jan 21 (Reuters) - Telekom Austria has secured a deal for the first time to raise pay for its former public sector employees by less than for its other staff in Austria, it said on Tuesday.

The deal, which a spokesman said would cost the company a low double-digit million-euro amount, will see staff on old public sector contracts get a rise of 1.55 percent for 2014, while other Austrian staff will get 2.4 percent.

Personnel costs have weighed on the former state telecoms operator, 53 percent of whose 9,100 Austrian employees are still on civil servant contracts.

They are entitled to 5 percent pay increases every two years on top of any collective agreement and are almost impossible to fire.

The works council had fought against separate deals for the former civil servants and other staff.

Telekom Austria's costs for its Austrian personnel were 680 million euros ($922 million) in 2012 - barely changed from a decade earlier despite a 34 percent reduction in staff numbers.

Core earnings at the group, which is 26 percent owned by Carlos Slim's America Movil and 28 percent by the Austrian government, fell 13 percent in the third quarter, partly due to personnel expenses in Austria.