Unilever strike threatens Pot Noodle production

Thousands of students will be wondering where their next meal is coming from as industrial action halts Unilever production lines.

by Elizabeth Anderson
Last Updated: 06 Nov 2012
Staff at the consumer goods company, which owns brands from Persil to higher education’s favourite staple the Pot Noodle, are angry at plans to close the company’s final salary pension scheme. It’s the second strike by Unilever employees in as many months, after staff downed tools in December for the first time in the company’s 82-year history.

Eleven days of protests are in the pipeline, affecting the production lines of brands including Marmite, PG Tips, Lynx, Flora, Dove and Pot Noodle across the group’s eleven sites. The strikes started early this morning in Norwich and Warrington, and will spread across the country over the next two weeks.

The strike has been expected for some time, as staff and management wrangle over the company’s pension pots. Unilever’s employees are unhappy with the decision to end the final-salary pension scheme and replace it with a career-average scheme for all staff. The final-salary system, which was closed to new staff in 2008, will now be shut down completely, affecting around 5,000 workers.

Workers argue it will mean pension cuts of between 20% to 40%. Unilever says it can no longer keep pace with the rising costs of pensions, and is tackling a deficit of £680m. Unions say the company can afford it, arguing that the total pay package of chief executive Paul Polman jumped by 50% in a year, standing at more than 285 times that of the company’s average employee.

Unilever joins a long list of companies rethinking their generous retirement packages. While you can’t blame workers for protesting against it, the truth is that final salary schemes are a thing of the past. With increasing life expectancy, companies fear footing retired workers’ pensions for what could run into decades. Shell announced earlier this month it was scrapping its final salary pension scheme - and was the last UK company in the FTSE 100 to do so, with most firms opting for the career average alternative. Recent figures show that nine out of 10 private sector-defined benefit schemes are now closed to new entrants.

Realistically, the 11-day strikes are more a kind of public mourning than a negotiation. But while Unilever’s decision may not be unsurprising, part of the reason behind employees’ anger is the speed of the change. Even after negotiations to delay the closure date, the final salary scheme will end in less than six months. Unilever is adamant it won’t back down, and the unions are too. This is one problem that won’t wash away easily.       

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