Unilever unions to push on with strike ballot

Unions at Unilever vowed to press on with a ballot for industrial action over the closure of its final salary pension scheme despite winning a number of concessions from the company.

The Anglo-Dutch manufacturer of Dove soap and Flora margarine, which employs around 7,000 workers in the UK, announced plans to close its final salary pension scheme in April.

It was forced to extend consultations, which wound up late on Thursday, in the face of workers’ ire at seeing their final salary pension replaced with a hybrid offering less generous benefits.

Under the revised rules hammered out in the talks, an additional 500 members of the existing final salary pension scheme will be covered by a payment based on career average salary as the upper limit was lifted from £41,000 to £48,000.

Alan Walters, human resources vice-president at Unilever UK, said he felt “very positive” at the outcome of some 100 days of negotiations.

“We have made three big changes and the fact is we have now ended up in a place where more than three-quarters of our 5,400 existing final salary scheme employees will be in the career average plan. I think that places us very competitively in the market place because we want to do the right thing by employees.”

Workers were less convinced. Unions, angered by what they see as the “arrogant” removal of the final salary pension scheme, expect to announce the timetable for a ballot on industrial action over the coming weeks.

“The mandate all three unions [Unite, the GMB and Usdaw, which together have some 3,000 members in Unilever] have from members is to protect the final salary pension scheme and the concessions the company has come up with do not do that,” said Allan Black, the GMB’s national officer.

Non-unionised workers, of whom there are 4,000, said the proposed changes “are the most advantageous … that could be secured in the context of a difficult consultation process”.

However, in an agreed statement, they added that “they did not accept that Unilever needed to make these changes to be a successful business in the future, however they recognised and respected the strong company desire to make these changes”.

Unilever says the move is to help ensure “long-term financial sustainability and help maintain the competitiveness of the business in the UK”.

According to the National Association of Pension Funds’ 2010 annual report, 17 per cent of final salary schemes are now closed to future accrual, up from 7 per cent in 2009. Many employers have been less generous to workers than Unilever, because they generally abandon any link to final salary and shift entirely to a scheme where benefits are entirely dependent on the level of contributions and investment returns.