Workers 'seeing basic pay fall'

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About 3% of the UK's workforce have seen basic pay fall in the past year, a Chartered Institute of Personnel and Development (CIPD) survey suggests.

Those in the construction sector have been hardest hit, it said, with 10% in that industry seeing pay fall - not including overtime or bonuses.

The news comes as thousands of workers actively negotiate lower pay packets as an alternative to redundancy.

Workers at JCB and Corus are among those facing pay cuts.

And Honda and BMW have scaled back production in order to cut costs.

Deterioration expected

The CIPD survey of 2,600 workers and management still in full-time employment found that one in 10 of those polled in the construction sector were earning less than they did 12 months ago.

Meanwhile 19% of chief executives said they were earning less basic pay than at the same time last year.

Perhaps these were being held back because they weren't quite sure how bad the recession was going to be Charles Cotton<CIPD>

Some of Britain biggest sectors including - including banking, retailing and manufacturing have been making sizeable job cuts.

Unemployment officially stands at 1.8 million, but many economists think that it could reach or even breach 3 million by the end of next year.

And the CIPD says it expects that conditions will deteriorate.

"I think we're seeing the tip of the iceberg," the CIPD's Charles Cotton told the BBC.

"Organisations have been announcing redundancies. Perhaps these were being held back because they weren't quite sure how bad the recession was going to be.

"We're predicting next year that we're going to see more organisations making more and more redundancies."

Employer concern

Trade unions have said that discussions with employers were essential to cope with the downturn.

"I've no doubt there are some employers who are exploiting the workforce but you'll find most of the reputable employers are as concerned as we are," the national secretary of the GMB Union, Keith Hazelwood told the BBC.

"So we're having to work with employers to come through this recession."

Earlier this week unions representing the 25,000 UK workforce of steelmaker Corus rejected the firm's proposal that staff take a 10% pay cut.

While the Community, Unite and GMB unions said talks would continue with Corus, they said they needed more details of the firm's plans for 2009.

Corus says it needs to cut costs due to falling steel sales, the impasse raises the fear of job losses.

In October, thousands of staff at Staffordshire-based JCB accepted a shorter working week in order to save about 350 jobs across the UK.