Unions push for further stoppages after multinational consumer giant bid to close final salary scheme

Consumer goods company Unilever faces a renewed wave of strikes this month over its decision to close its final salary pension scheme.

Before Christmas, Unilever, which produces goods such as Dove soap, Wall’s ice-cream, PG Tips and Marmite, was hit by the first ever national strike involving its UK operations after revealing plans for a pensions shake-up. The firm, which employs around 7,000 workers, is looking to move 5,000 staff to a less generous career average scheme by the middle of next year. The remainder are already signed up to the new scheme, which was closed to newcomers in 2008.

On Saturday, leaders of the Unite, Usdaw and GMB unions said they would call for a series of strikes from 17 January, claiming new pension arrangements could cut retirement income for staff by 40%.

Jennie Formby, national officer of Unite, said: “It would seem that Unilever believed the workers would give up after one day’s strike but they are badly mistaken. The workforce is angry that the company has refused to meet us or to attend talks at the conciliation service Acas.”

Allan Black, national officer of the GMB said: “Unilever need to get the message that profitable companies will not be allowed to walk away from their savings commitments to their loyal workforce.”

There was uproar when Shell, the last remaining FTSE-100 company with a final salary scheme in Britain, said it was closing it to new members, even though it recorded a surplus in 2010. Shell’s decision is part of a wider trend in Britain where only 19% of final salary and average salary schemes are open to new employees. The era when a majority of British staff in the private sector could be confident of a guaranteed income throughout their retirement is coming to an end.

Workers in the public sector are being asked by the government to pay more and work longer in order to retain benefits that are more reliable than those on offer from private firms. A study by the Association of Consulting Actuaries found that nine out of 10 private sector-defined benefit schemes are now closed to new entrants and four out of 10 prevent existing staff building up further benefits.

Unilever previously said its UK pension arrangements had to reflect realities if they were going to be sustainable into the future. In a statement, Unilever said it was “deeply concerned by the disproportionate action” of the trade unions. “We believe the provision of final salary pensions is a broken model which is no longer appropriate for Unilever. The pension arrangements which we plan to implement in July this year are exceptionally competitive. It is currently not clear how the dispute with the trade unions will be resolved – but we are continuing to urge our employees who have participated in industrial action to give further objective consideration to the very competitive new arrangements.”

(The Guardian, January 7, 2012)

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