BT Group is facing a strike call even though it awarded a £1,500 pay rise to 58,000 of its staff.
Last week, the Communications Workers Union (CWU) rejected an offer of £1,200 for 40,000 of its members describing it as a relative pay cut, adding today that it would now ballot over strike action.
"We have no choice now but to immediately prepare for a statutory industrial action ballot," it said in a tweet.
BT described the pay rise as its biggest pay round for frontline employees in 20 years.
Workers at BT, Openreach, Plusnet and EE frontline will get the award, which the telecoms group said was a reward for keeping the country connected during the pandemic.
The FTSE 100 group said the rise worked out at around an 8% increase for some staff and over 3% for the highest-paid.
BT added the award, which will cost it around £90mln, would be backdated to 1 April to offset rises in a host of utility bills and other household costs.
Philip Jansen, BT’s chief executive said: “We know that the cost of living continues to rise and by making this award, we’re ensuring that our lower-paid workers will benefit most and as soon as possible.”
BT paid a bonus of £1,500 to its frontline staff (retail stores and call centres) last year in the form of shares and a cash payment of £1,000.
The company employs around 100,000 people in total with 83,000 of these in the UK.
Tesco meanwhile has handed out a pay rise for its store and distribution centre staff worth around 5.8%, with hourly rates rising to £10.10 an hour from £9.55.
Attracting (and retaining) staff since the reopening of the economy after the pandemic is proving a nightmare for many businesses in the retail, hospitality and services industries.
Airlines and airports have been crippled this week by staff shortages and absences due to Covid.
Recruiter Robert Walters said that among white-collar staff pay rises of 20% are the norm, with a shortage of qualified professional people everywhere.
The group reported profits up 265% today with fee income in Europe up by 35%.
Shares in BT rose 2.3% to 190.5p while Robert Walters rose 2.4% to 694p.