Nestlé denies ‘pension betrayal’ in unions row

01-Jul-2015 - Last updated on 03-Jul-2015 at 14:58 GMT

Not so sweet: Nestlé could face strike action over its pension reform plans

Related tags Pension

Nestlé has denied union claims of “pension betrayal”, after revealing plans to close its defined benefit pension scheme and replace it with a defined contribution scheme.

But the manufacturing giant was accused of “acting in bad faith” in a joint statement today (July 2) from the GMB and Unite unions.

Nestlé’s plans close its career average pension scheme and unpicked the pension changes agreed in 2010, they claimed.

‘Nestlé is tearing up their contracts’

Unite national officer Julia Long said workers would regard the changes as “an act of betrayal” by Nestlé. “Nestlé is tearing up their contracts with their future, with many workers facing being worse off in retirement,” said Long.

“We will not stand by and let that happen and would urge Nestlé to think again and honour its past promises.”

Nestlé said since introducing the defined contribution scheme for employees, while continuing to offer a defined benefit scheme, five years ago, the costs and risks of providing the scheme have risen significantly in recent years. So, the firm planned, with regret, to close the scheme and replace it with, what the firm claimed was, one of the most attractive defined contribution schemes available.

Ceo and chairman of Nestlé UK and Ireland, Dame Fiona Kendrick, said: “We realise that these proposed changes will cause concern for employees who are building up defined pension benefits in the Nestlé UK Pension Fund, or are eligible to do so.

Strike threat

“Strike action, with all its consequences for Nestlé's corporate brand if these proposals are implemented, looms large across Nestlé in the UK."

Stuart Fegan, GMB

‘Very sorry ... to propose these changes’

“We are very sorry that we have to propose these changes but under the circumstances we believe it is the right option.”

The firm said it would consult with employees and trade unions and consider their response before making a final decision.

But GMB national officer Stuart Fegan said: “The 7,600 Nestlé workers which these proposals affect will wonder why a company such as Nestlé generating significant profit in the UK and other world markets can justify such detrimental plans.”

The plans directly affected Nestlé workers who make the firm the leading world food manufacturer, he added. See the list of sites affected by the changes in the box below.

The GMB urged Nestlé to reconsider its pension plans, as its UK workforce would not accept the changes willingly.

“Strike action with all its consequences for Nestlé's corporate brand if these proposals are implemented, looms large across Nestlé in the UK,” warned Fegan.