Rolls-Royce union blames rising bonuses for scandals

Pile Of Coins

The union representing Rolls-Royce managers has blamed the company's "bonus culture" for the string of bribery and corruption scandals dogging the company.

Tony Tinley, the Unite regional officer who represents 413 managers at Rolls-Royce's Derby headquarters, said he questioned whether the engine manufacturer will ever be able to tackle alleged corruption "while the company's bonus culture places emphasis on cash rewards for managers".

It was revealed last week that hundreds of Rolls managers collected bumper bonuses last year. The company's annual report showed that Rolls' chief executive John Rishton collected a £4m payout from the firm's long-term share-based bonus scheme (more than double the previous year's payout). As well as the executive team, several hundred senior managers in the scheme collected inflated bonuses.

A spokesman for Rolls said the company has a "relatively conservative" bonus policy and individual payouts are made only if the overall company hits its targets. "Then, when reviewing an individual's performance, the appraisal process looks at both what has been achieved and how it was achieved."

Rolls said it was "very clear that we have a zero tolerance policy for bribery and corruption". The spokesman said the company was "currently carrying out a detailed programme of training" to support its newly beefed-up anti-bribery code of conduct.

Rolls also pointed out that it this week introduced measures to strip bonuses from bosses sacked for any involvement in corruption.

Tinley, who worked for Rolls for 20 years before joining Unite, dismissed the FTSE100 company's launch of a whistleblower hotline as a gimmick that does not go far enough to address the alleged bribery scandal, which has spread to three countries.

"It is important that it [the whistleblower hotline] is not a gimmick and addresses the issues raised," he said.

"We also question whether the problems Rolls-Royce face will ever truly be dealt with while the company's bonus culture places the emphasis on cash rewards for managers rather than quality outcomes for the business.

"Unite would prefer that the grievance procedure is used to ensure that stringent standards of complaint handling are adhered to. We would also say to Rolls-Royce that there is no substitute for training managers on acceptable conduct."

Tinley worked for Rolls between 1979 and 1998, during the period of the most prominent bribery allegations. He was an instrument mechanic before becoming chair of the works committee, representing staff to management.

Rolls this week launched a 24 hour "ethics line" for its 55,000 employees to report concerns about bribery in the wake of several international law enforcement agency investigations into allegations the company paid multimillion bribes in Indonesia, China and India.

The Serious Fraud Office (SFO) has launched a criminal investigation into the allegations, while the US Department of Justice and India's Central Bureau of Investigations are also investigating the claims.

Rolls' chief executive, John Rishton, said the "confidential reporting line" was designed to "make sure that we can hear about and address any matters of concern".

Dick Taylor, the former employee who blew the whistle on $20m (£12.5m) of suspected bribes paid to the son of an ex-president of Indonesia, has said his concerns were ignored for six years. He added that after reporting them internally he was told he "would be sacked, no matter what".

Taylor, who worked for Rolls for more than 30 years including a long stint in Indonesia, quit and began posting his allegations on newspaper websites around the world, including the Guardian's.

In one of the posts he said: "Just one example is that Tommy Suharto was given $20m and new blue Rolls-Royce car … to force the Indonesian airline Garuda to take Rolls-Royce Trent 700 engines on the A330 aircraft they were buying."

Meanwhile, Rolls bought out German car firm Daimler's 50% stake in Rolls-Royce Power Systems Holdings, a joint venture making high-speed engines for ships and the oil and gas industry, for an undisclosed amount.

Powered by Guardian.co.ukThis article was written by Rupert Neate, for The Guardian on Friday 7th March 2014 19.22 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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