Unilever strikes begin again
Unilever workers have begun a 10 day series of rolling strikes, marking only the second time in its long history where workers have felt it necessary to take action. The first time was December 9th last year.
Unilever’s plans to axe its final salary pensions scheme in favour of a new career average pension scheme from the 1st July this year are the source of the workers’ dispute.
The company have said that they need to change the pension scheme in order to restrain the rising costs of supporting the scheme. The scheme was closed to new staff in March 2010, but existing members, an estimated 5,000 workers, were still able to maintain their pension.
Part of a previous deal to keep the final salary pension scheme open required that workers pay more in order to safeguard it. Contributions rose from 5% to 7% and workers were able to keep the scheme alive.
Unilever now claim that the final salary pension scheme is a ‘broken model’ and want to move all of their workers onto the new pension scheme. They also argue that this will protect the longterm sustainability of their business.
However, the unions argue that the closure of the scheme is for profits only. A spokesperson for Unite labelled the move as ‘predatory capitalism’ and argued that the company has no financial need to close the scheme.
Unilever’s profits were last estimated to be over £6 billion, and the changes to the pension plan are estimated to cost workers an average 20% of their retirement income. The unions argue that some will lose up to 40%.
Allan Black, from the GMB, said: “Unilever can afford to sustain the current pension scheme unchanged due to the profitability of the company. The unions are able to put forward constructive alternative proposals on pensions, but these have never been considered by Unilever.”
However, Unilever estimate that the pension scheme currently has a £680 million deficit, which is partly due to the company taking a legal 7 year holiday from paying its contributions up to 2002. They argue that taking no action now would only create problems in the future. They also point out that the career average scheme that they are offering is highly competitive and are urging those taking industrial action to reconsider.
Private sector final salary pension schemes have started to become a rare commodity for workers in the UK. Information from the Association of Consulting Actuaries has revealed that 90% of private sector defined benefit pension schemes have now been closed. Royal Dutch Shell recently became the last FTSE 100 company to close its final salary scheme.
The last strike action by Unilever workers saw over a third of its 7,000 strong workforce walk out for a day. The latest action will see a series of ‘rolling strikes’ at different locations around the England and Wales, finishig with a strike at the Pot Noodle factory in Crumlin, Wales on 28th January.
The Unions warn that the action will continue, if necessary.