Tata Steel UK unions mull industrial action

By: |
Mumbai | Published: March 17, 2015 12:17:37 AM

Disagreements are arising over employee pension benefits

The trade unions representing Tata Steel’s employees in the UK are mulling an industrial action against the steel maker owing to disagreements arising over employee pension benefits.

A spokesperson from the Community trade union based in the UK told FE that both the sides have not agreed on how to fund £966-million deficit in the pension fund and over Tata Steel’s decision to abandon British Steel Pension Scheme (BSPS) and move towards a ‘money purchase’ pension scheme. “The unions held several rounds of discussions with the Tata Steel management without reaching any settlement.

We plan to hold a ballot amongst our members to decide whether we should undertake industrial action,” the Community spokesperson said.

Tata Steel did not respond to a detailed questionnaire sent by FE at the time of going to the press. The Financial Times on March 13 reported that Tata Steel has announced plans to stop the BSPS, a move that could impact 16,000 employees. It quotes a Tata Steel statement that said, “We have been unable to come to an agreement that would have enabled defined benefit provision to continue and will be consulting employees on a proposal to close the defined benefit scheme to future accrual.”

The spokesperson explained that there is a disagreement over how the deficit in the BSPS deficit be funded with the unions opposed to the Tata Steel’s proposal to cut certain employee benefits like caps on pensionable pays and provisions on early retirements. The unions are also opposed to moving from the BSPS to a ‘defined contribution’ or ‘money purchase’ pensions scheme where the employees, the company and the government will make contributions to the pension fund which will then be managed by a pension provider. The spokesperson said that the money purchase scheme shifts greater burden on employees.

Roy Rickhuss, chairman of the National Trade Union Steel Coordinating Committee, which includes national representatives from three major trade unions — Community, Unite and the GMB — in a statement, said that the unions have made every effort to compromise with the company, even discussing the possibility of meeting the deficit through changes to member benefits, despite the fact the company is legally obliged to pay for the deficit and has always done so in the past.

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