Blog: Dean BestWorkers take pension protests to Unilever's front door

Dean Best | 10 January 2012

On the north bank of the Thames, Unilever's London HQ has been the home of the consumer goods giant for almost 90 years. Today, on a mild but grey Tuesday afternoon in January, it formed the backdrop for the latest instalment of what is likely to be one of the most dispiriting episodes in the company's history.

Scores of Unilever workers travelled from sites across the UK to protest at the Anglo-Dutch conglomerate's UK head office about the company's plans to change its pension scheme. For a company founded on philathropy that "set up projects to improve the lot of their workers" (the quote is taken directly from Unilever's corporate website), it is disheartening to see the business at odds with many of its staff.

However, employees protesting outside Unilever House today (10 January) told just-food of their "anger and betrayal" at the Marmite and Pot Noodle maker's plans to close its final salary pension scheme.

Workers and union officials argue the plans would see some employees lose up to 40% of their expected pension and believe Unilever has no justification for ending the scheme and replacing it with an "inferior" alternative.

Unilever says the change is "a tough and necessary choice which reflects the realities of rising life expectancy and increased market volatility". However, many of its employees are unconvinced by that argument, claim Unilever's pension scheme is well funded and are preparing for a programme of rolling strikes, which are scheduled to start on 17 January until 29 January. Unions claim that over 2,500 Unilever workers took part in a 24-hour walkout last month.

"This is a very wealthy company, this is a well-funded pension scheme and the company themselves told us there is no financial imperative, yet they won't talk to us about ways of keeping the scheme open even though we put forward suggestions that are of limited risk and cut costs as well. The company just didn't want to know," Unite national officer Jennie Formby said.

In theory, Unilever's arguments are valid. Increasing life expectancy means some pension schemes are unsustainable, Market volatility could mean Unilever faces paying more into its scheme to meet any deficit.

However, with CEO Paul Polman earning a base salary of EUR2.9m (US$3.7m) according to Unilever's 2010 annual report (indeed, Unite cites data from pension advisers PIRC that says Polman received a total remuneration of EUR54.2m in Unilever's last financial year), it is hard not to feel some sympathy for factory workers faced with lower-than-expected pension settlements.

And there is no denying the frustration that some Unilever workers feel at the planned changes. Bill Hodgson, a worker in the research lab at Unilever's site in Port Sunlight in north-west England, said there was "shock, anger and a feeling of betrayal" when the company announced its plans last year.

"It's certainly the first national strike that Unilever has had in the UK. We're not traditionally a militant workforce," Hodgson said. "When you consider how Unilever is doing - double-digit growth, billions in profits - and the company saying there is no fiscal necessity to do this, that it's about competitiveness, that's when most people decided they weren't going to take this."

Hodgson, who has worked for Unilever for 20 years, said there has been a "very noticeable change" in the ethos of the company, which he described as a "very paternal" business. That change had started before Polman became chief executive but had "accelerated" since the Dutchman took the job in 2009.

Where does this leave Unilever? Unions say the planned stoppages will hit production but the company says it has made contingency plans. Formby insists union officials are ready to sit down and talk to Unilever but negotiations broke down in September and there is no sign that they will resume any time soon. (Hodgson, incidentally, said no Unilever representative came out to talk to the protesters today).

Unilever could not be reached for comment this afternoon but its statements so far indicate it intends to proceed with its plans. "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," Unilever has said.

Of course, if there is a negative impact on production, it could force Unilever to the table but it is unclear how many strikes protesters will have to hold to hit supplies.

The strikes and protests could dent Unilever's reputation among consumers but, again, the strikes would need to have an impact on production and on supplies reaching stores for the average shopper to take notice, despite the fact that pensions (witness the public sector protests) and executive pay have been headline issues in recent months.

For now, it seems there is stalemate, with Unilever seemingly intent on implementing the changes and workers set to hold more industrial action.


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