UK – Chemical manufacturer, Rhodia, is facing staff strike action this Thursday following announcements that it intends to close its final salary pension scheme to new employees.

A ballot of workers by the unions, GMB, Amicus and T&G, resulted in the decision to take industrial action at two of Rhodia’s 12 manufacturing sites in the UK. The 330 union members who voted in favour of strike action represent around 25% of employee members of the Rhodia pension fund.

As a result of financial pressure, Rhodia announced last week that it would be closing its final salary scheme to new employees “to protect the interests and benefits of current Rhodia employees and ensure the future security of the fund.” In its place Rhodia has set up a defined contribution scheme for new employees.

The fact that the closure is only to new employees is not appeasing the unions. Explained a spokesman for Amicus: “By closing the scheme to new employees, there will be less people paying in, and therefore less scope to improve benefits. As the scheme gets older, and there are less members, those members that remain will be less able to renegotiate benefits, and improve benefits.”

Rhodia says it is standing firm behind its decision, but remains open to meaningful discussion with the unions involved.

Following the acquisition of UK company A&W in March 2000, and the merger of the Rhodia and A&W pension funds, Rhodia has been forced to increase the level of employer contributions for former A&W staff, and has made cash injections of 3.5 million pounds (5 million euros) a year to correct the deficit of 85 million pounds( 122 million euros). In January this year Rhodia increased its contributions for all staff by a further 6%.