Fat cat's workers on 81p an hour

One of the most prominent fat cats in the privatised utilities is presiding over a company that paid workers 81p an hour for digging trenches - among the lowest rates ever recorded in modern Britain.

Henry Casley, who retired as chief executive of Southern Electric with a package estimated to be worth anywhere between pounds 250,000 and pounds 570,000, still retains responsibility for subsidiaries, one of which paid contract workers pounds 33.04 net for a 50-hour week. Mr Casley is now understood to earn about pounds 100,000 a year for a non- executive seat on the board at Southern Electric where his posts include the chairmanship of the cable layers MB Burke.

Workers taken on to dig trenches for MB Burke received pounds 122 each for three weeks' work. The Barnsley-based company deducted from their pay pounds 200 for the use of a mini digging machine.

John Waddle, 27, one of the trench diggers, said he and his two colleagues were not warned that such an amount would be taken from their wages to pay for the rent of the equipment. He said they worked from seven in the morning until nearly eight at night."I thought I would be earning a bit of money for Christmas and now I've nothing," he said.

Ken Taylor, finance director at MB Burke, said the men were not paid by the hour, they had opted for piecework. All the conditions of employment and pay deductions were made clear in their contracts, he said. "Unfortunately they didn't produce the quality or the quantity of work required."

He said the men dug around 100 metres of trench a week, whereas the normal rate of production is between 200 and 500 metres, depending on the degree of effort and the condition of the ground. The average pay for such work was around pounds 275 a week, Mr Taylor insisted.

"We are very proud of our job creation record. Our business operates mainly in the Midlands, Yorkshire and the North East where people have been hit hard by the closure of mines and steelworks. We now employ 1,750 people, a workforce which has increased by 250 this year. We wouldn't have been able to recruit so many people if we were paying low wages," he said.

The Southern Electric directors ultimately responsible for the firm came under fire earlier this year after receiving pay increases of between 14 and 18 per cent. Mr Casley enjoyed a a 14 per cent rise including a pounds 56,000 bonus. John Deane, group finance director received a similar percentage increase including a pounds 35,000 bonus.

One industry source calculated that before privatisation the eight directors at Southern Electric earned a total of pounds 185,000, now they were on pounds 1.1m plus share options.

Following recommendations by the Greenbury report into boardroom remuneration, last year Southern Electric reduced directors' employment contracts from three years to one. However the change was to be introduced over a two- year period.

A spokesman for Southern Electric refused to divulge the precise extent of Mr Casley's retirement package or his present salary. "That is not in the public domain yet. You will have to wait for the annual report."