Tata Steel Europe leadership faces a Union battle through its Pension Scheme proposals

Tata Steel Europe announces plans to end its current British Steel Pension Scheme on April 1st 2016.   It faces a familiar battle with the British Steel Unions in the UK, where, according to India’s Economic Times, a claim of a total breakdown of faith in Tata Steel’s leadership has been made. A 60-day statutory consultation period begins on March 23rd, 2015

“We feel we have no option but to consult our members and prepare to ballot for industrial action to defend their hard won pension rights,” said Roy Rickhuss, General Secretary of the Community trade union and Chairman of the National Trade Union Steel Coordinating Committee. “It appears they are hellbent on closing the scheme and are not prepared to compromise. We have lost all faith in the company and its leadership, which has brought us to the brink of a major national industrial dispute.”

Tata Steel’s Industrial Relations record

The Tata group has a well-earned reputation of an enlightened employer for over a century. Within the group, Tata Steel has itself been hailed as a global best-practice organization.

 “Industrial Relations” is a function of many variables. Some of the contributing factors are participative management, grievance settlement machinery, wage determination etc.

Tata Steel is the largest steel manufacturer in India with an annual capacity of 23.5 million tons and employs approximately 80,000 workers. Tata Steel workers in a century-old history have not gone on a strike at Jamshedpur, where its Indian manufacturing operations are largely based.

Margaret Thatcher and British Steel

The story brought flooding back to my mind Margaret Thatcher’s battles against the Unions. These are best remembered today by the violent confrontation with the miners. But another important struggle took place over the future of the steel industry.

The steel industry as political football

A patchwork of small and inefficient steel makers in the UK became a political football with successive nationalization and re-privatization changes since the 1950s. Broadly, the industry failed to modernize competitively.

After the Thatcher era, a major Dutch steel-maker took over, with a view to and its fixing the problem. The new firm was relabelled as Corus, and was effectively a merger of the old British Steel with the much larger Hoogovens

The anticipated efficiency gains did not accrue, and Corus was subsequently acquired by the Tata conglomerate and became part of Tata Steel Europe.

Tata, like Hoogovens before it, inherited the complex industrial relations arrangements of the original British Steel companies. These are issues which remain in need of resolution as the next battle for the future of the steel industry in Britain begins

To be continued

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