A thoroughly modern British labour dispute starts on 17 July, when members of the GMB and Amicus trade unions employed at Rhodia manufacturing sites go on strike in protest at the closure of the company’s defined benefit pension plan to new members.
“It’s regrettable that despite no national majority and only two out of six sites voting in favour of strike action, the GMB and Amicus unions are resolved to continue this dispute over an issue that does not affect the pension provision of current employees in any way,” says Rhodia UK Director of HR, Bob Tyler. “We are closing the final salary scheme to new members to protect the interests and benefits of current Rhodia employees and ensure the future security of the fund.”
Rhodia protests that, following its acquisition of Albright & Wilson (A&W) in March 2000 and the merger of the Rhodia and A&W pension funds, Rhodia increased the level of employer contributions for former A&W staff, started making cash injections of 3.5 million per year to correct the considerable deficit inherited from the Albright & Wilson fund and maintained contribution levels for existing Rhodia staff. This meant Rhodia was contributing from April 1, 2001 on average 25% of pensionable salary for each member of the fund. Union claims that the company had taken a contributions holiday in recent years are totally unfounded.
In January this year Rhodia increased its contributions for all staff by a further 6% raising the average company contribution to 31% of pensionable salary. Rhodia has no plans to close its final salary scheme to current employees, and has set up a competitive money purchase scheme for new employees in line with those offered by companies such as M&S, BT and ICI.