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The union representing BT workers has announced plans to ballot its members on possible industrial action.

The Communication Workers Union (CWU) will ask members to vote on strike action if BT fails to offer an improved pay deal before 4 June.

The news came shortly after BT confirmed that chief executive Ian Livingston would be paid a £1.2m bonus for his work last year.

The CWU, which represents 55,000 BT staff, has rejected a 2% pay offer.

It wants a rise of 5% which it says is in line with inflation.

The motion calling for a strike ballot was agreed at the union's annual conference.

BT has been asking managers to provide details of their broader skills in case strikes go ahead.

But the �鶹Լ��'s business correspondent John Moylan said the threat of industrial action is often used as a bargaining tool in pay negotiations.

Hitting targets

The CWU said the dispute was about fairness.

"I don't have any problem with Mr Livingston or others getting the bonuses they get for reaching their targets," Andy Kerr, deputy general secretary of the CWU, told the �鶹Լ��.

"The thing is about fairness here. It's my members that actually deliver those targets for Mr Livingston and co. So if it's good enough for him it's good enough for our members."

Chief executive Mr Livingston hit 142 out of a maximum 200 targets set by the company, earning him a £1.2m bonus out of a possible £1.7m, BT's annual report said.

His bonus is in addition to his £860,000 salary.

Mr Livingston turned down a pay rise of £50,000 last year because of what he called the unacceptable performance of BT, so it was postponed to this year.

He has chosen to accept 2% of the rise - the percentage salary award made to employees - and is donating the rest to charity.

Three other members of the senior management team, one of whom has now left, will get bonuses of between £463,000 and £503,000.

'Laughable'

An internal e-mail to BT managers seen by the �鶹Լ�� says: "Declare your skills... You will be aware of the company's final pay offer to the CWU.

"Like many other companies we have a difficult year ahead of us with the global financial climate and increasing competition."

The CWU's Mr Kerr said that BT's plans were "laughable".

A BT spokesman confirmed preparations to deal with any industrial action were in place, saying: "While we hope to agree a pay deal, each line of the business will be making preparations for the possibility of strike action."

The e-mail asks managers to tell the company about any useful abilities they may have, even though they may be from a number of years ago.

It asks for managers to provide a list of these by 26 May.

Widespread bonuses

A BT statement released ahead of the annual report said: "BT has made significant progress this year and so the higher bonuses are appropriate as we link remuneration to performance.

"Almost 30,000 BT staff will also get higher bonuses as a result (not just the top executives). Performance-related remuneration is our favoured approach and our door is always open - and has been - if the CWU wish to speak to us about such schemes. "

Earlier this month BT said it had returned to profit, making £1bn ($1.45bn) in the year to 31 March. It had made a loss of £244m the previous year.

Over the past two years it has reduced its headcount by 35,000, a fifth of its workforce.

Following a pay freeze last year, BT is offering an increase of 2% in pensionable pay, with a guaranteed bonus.

As well as the "difficult" financial climate referred to in BT's e-mail, the company is also battling to reduce a giant £9bn pension deficit.

BT employees have been contacting the �鶹Լ�� to give their views of the dispute. Here is a selection of their comments.