Unite and the GMB union accused Nestlé UK of acting in ‘bad faith’ today (July 2) as the company announced plans to close its career average pension scheme in a move that unpicks pension changes agreed in 2010.
Warning that the move could be seen as an ‘act of betrayal’ by the workforce, the unions urged the company to think again. Under the plans Nestlé wants to close the defined benefit scheme, currently offered on a career average basis and replace it with a defined contribution or ‘money purchase’ scheme.
The proposals backtrack on pension changes introduced five years ago which saw the final salary pension scheme scrapped for a career average scheme on the understanding that it would be an industry leading scheme. A money purchase scheme was also introduced at the time.
If the proposals go ahead the career average scheme will be closed to new entrants from 2016 and close to future pension build up for existing members from the start of 2017.
Unions say that the changes will affect workers making Nestlé products across the UK ranging from pet food and bottled water to confectionary and breakfast cereals.
“Many loyal workers will feel led up the garden path and see these changes as an act of betrayal by Nestlé,” said Unite national officer Julia Long. “Five years ago they agreed to pension changes in good faith on the understanding that their pension would be secure for the future.
“Now Nestlé is tearing up their contracts with their future with many workers facing being worse off in retirement,” she added. “We will not stand by and let that happen and would urge Nestlé to think again and honour its past promises.
GMB National Officer Stuart Fegan condemned the proposals, especially in light of the giant food manufacturer’s healthy profits.
“The 7,600 Nestlé workers which these proposals affect will wonder why a company such as Nestle generating significant profit in the UK and other world markets can justify such detrimental plans,” he said. “Particularly as these proposals directly affect those Nestlé workers who manufacture the products that make Nestlé the leading world food manufacturer.”
“We urge Nestlé to think again on these proposals as we fear that the UK workforce will not accept these changes willingly,” Fegan added. “Strike action with all its consequences for Nestlé’s corporate brand if these proposals are implemented, looms large across Nestlé in the UK.”