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Thousands of Unilever workers on pension strike

The Momentum UK Team 18 January 2012

Around 2,500 workers at consumer goods giant Unilever are to go on strike today in an increasing row over pensions.

Members of three trade unions Unite, Usdaw and GMB are opposing plans to close the company's final salary pension scheme.

The strikes are due to happen over the next 11 days at various sites around the UK. Factories including Port Sunlight on the Wirral, Warrington, Norwich, Leeds, Gloucester, Trafford Park in Manchester, Purfleet in Essex and Crumlin in Gwent will all be hit by disruptions.

Industrial action, which will halt the production of top brands such as Marmite, PG Tips and Hellmans, are hoped to re-start negotiations between Unilever and employees who oppose the switch in pension schemes which, unions say, will cut retirement income by between 20% and 40%.

Unilever closed its final salary pension scheme to new members in 2008, moving 2000 workers to an inferior career average revalued earnings (CARE) scheme.

The dispute has stepped up after it was announced in March last year that the remaining 5,000 of the 7,000 employees would be moved onto a career-average scheme by 1 July 2012.

This is the second strike launched by Unilever staff in two months. The initial strike in December saw 2,500 workers out of a workforce of 7,000 and was the first national strike in the company's 80 year history.

Len McCluskey, Unite's general secretary, said that Unilever were "robbing" the pensions of working people: "[Unilever] is a company founded by Lord Leverhulme, a man who fought for worker's pensions.

"This is a wealthy company with a CEO who earns £6.7 m a year and their plans are outrageous."

Anger has been stoked after Unilever's CEO Paul Polman received 50% pay rise last year.

Unilever said: "Making these changes was a tough but necessary choice which reflects the realities of rising life expectancy and increased market volatility.

"We believe the provision of final salary pensions is a broken model which is no longer appropriate for Unilever."

"It is our responsibility to protect the long-term sustainability and competitiveness of our business, and to do so is in the best interests of our people."

The government has changed a number of legislation's regarding pensions including one which means they must now rise in accordance with inflation. Research from the Pension Corporation found that the additional cost to employers of providing a defined benefit pension has increased by 44% in the last 20 years as a result of some of these changes.

The closure of final salary pension schemes has risen significantly over the last three years, from 3% in 2008 and 17% in 2010, according to a survey conducted by the National Association of Pension Funds' (NAPF), an influential industrial body in pensions. 23% of schemes have now been shut to existing savers and new staff in 2011.

Some economists have been critical of the strikes believing Unilever staff pensions will still rank as some of the most competitive in the UK.

The strikes will continue until the weekend of 28 January.

- Please see other sections of the IFA site for more information and advice on personal and company pensions.

Momentum