Grangemouth Pension Dispute Continues

Submitted by AWL on 16 May, 2008 - 1:15

A fortnight after the Grangemouth oil refinery was shut down by strike action, talks continue between refinery owners (INEOS) and UNITE.

The strike by the 1,200 union members was in defence of the refinery’s final salary pension scheme, inherited by INEOS from the refinery’s previous owners (BP).

INEOS wanted to close the scheme to new staff, force existing employees to pay 6% of their salaries into the scheme, and financially penalise workers who opted for early retirement.

Calculated on an hourly basis, the strike was the costliest industrial action in British history. Despite its relatively short duration, the overall loss to INEOS and the British economy in general amounted to £600 million.

The government itself lost some £170 million in tax, as the Forties pipeline, which pumps ashore crude oil from 70 North Sea oilfields, was forced to close.

But rather than maintain the pressure on INEOS by announcing a further round of strikes if the company did not withdraw its proposals, last month’s strike action has been followed up by talks between INEOS and UNITE officials behind closed doors.

According to the UNITE website, talks resumed the day after the end of strike action. It was a “constructive and meaningful discussion” which “ended in a proposal that will be considered by the company and the union in the coming days with a view to finding a resolution to the pension’s dispute.”

But a further single-sentence UNITE press release, issued a week and a half later (on 8th May), was even more tight-lipped about the ongoing talks: “Representatives of INEOS and Unite met today and agreed a series of further meetings to discuss the current pensions issue with a view to resolution.”

Although some newspaper reports have referred to INEOS having withdrawn its proposal to close the final salary pension scheme to new staff, this has not been confirmed in any of the UNITE press releases.

And, according to the most recent reports about the INEOS-UNITE meetings, talks may continue for a further six weeks – meaning that, in the absence of further strike action in the next fortnight, a further ballot would need to be held before strike action could be resumed.

The £600 million impact of their 48-hour strike in late May underlines the tremendous power which the Grangemouth oilworkers can wield if they choose to do so.

Despite pressure from both the Holyrood and Westminster governments not to resume strike action, further industrial action would be the quickest and most effective means to ensure that INEOS backs down on all counts.