HONG KONG: Staff at eight companies that carry out contract work for PCCW have agreed to a 2 percent cut in pay.

The agreement came as Friday's deadline approached for contractors to accept a plan announced last week by the communications giant to cut contract fees by 10 percent.

PCCW's decision sparked a protest by about 300 staff from the contract companies on Tuesday.

Contractors' employees threatened further action intended to disrupt telecommunications services city wide if PCCW went ahead with its planned cuts.

The contract companies also agreed to a 5 percent cut in fees for work done under contract for PCCW, effective next month.

A contractors' representative surnamed Li said the companies accepted the agreement with PCCW because they did not want to see staff thrown out of work.

Li added that he hoped contract staff at the low end of the salary scale would not be affected by the pay cut. He said the lowest paid employees earn between HK$6,000-7,000 a month.

"We don't want to see salaries for our staff even lower than the social security payment," he said.

He assured contract staff that current benefits would be maintained and there would be no job losses.

The contractors expect to save on material costs and transportation expenses to make up for the 5 percent cut in their fees.

About 700 contract staff will be affected by the salary cut, amounting to about one quarter of the number employed by PCCW contractors.

The affected workers are chiefly responsible for installation and maintenance work.

One staff representative named Chan said workers did not want a salary cut but were forced to accept it.

"We understand operations are difficult and we as employees have to make a concession as well. We hope everyone can survive," he said.

Gordon Tsui, deputy director of the Hong Kong Federation of Trade Unions' rights and benefits committee said he hoped the agreement reached by the employers and employees could serve as a good example.

"We want other contractors and enterprises to be aware, sacking is not the only solution," he said.

He asked other PCCW contractors to come to similar arrangements with their workers.

A spokeswoman for PCCW said settlement of contract fees is a business decision and the company has no plans to make public comment on the accord.

She said talks with the remaining contractors will continue.

Although the labor dispute between PCCW contractors and their employees apparently is resolved, the matter of what will become of PCCW staff members remains in doubt.

A spokesman for a PCCW staff union said about 10 company employees were laid off by the company on Thursday. The spokesman said the union is concerned that other job cuts may follow in coming weeks.

(HK Edition 02/14/2009 page4)