Electrical Engineering and Electronics
Strategy for growth
PHS Compliance
Further to the takeover of CLM, Epsilon and PowerPlus to create PHS Compliance, a 30 day consultation period is underway concerning proposed changes to T&Cs. The main problem is caused by the impact of new processes on the bonus scheme. This can lead to a significant reduction in earnings for former Epsilon employees. However, due to the recognition agreement with Unite, the company is having to conduct the consultation on a collective basis with our shop stewards whereas CLM employees are not.
As a result, Unite is undertaking a campaign to recruit CLM staff into the union. PowerPlus employees are also being recruited into the Union. We currently have three shop stewards representing the north, midlands and south of the country with the potential of doubling the membership.
Prysmian Energy Cables – Installations
Following further national negotiations on the 2009/2010 wage negotiations the company proposed a 3.5% pay offer for 2011. The offer withdrew the previous proposal for an increase in 2009 which had been rejected by the membership ballot and reiterated the pay freeze for 2010.
Although the offer for 2011 was a welcome move, given that the company refused to reinstate the 2009 element this was also rejected by the negotiating team.
Prysmian Energy Cables
National level meetings have been taking place with all bargaining groups, Aberdare, Bishopstoke, Wrexham and Installations over proposals to move the pay date forward by two weeks. The effect of this would be to pay staff four weeks in hand. Currently the company pay two weeks in hand and two weeks up front. The proposal also provided for a bonus of £500 if the change was agreed and implemented by November.
Following adjournments and counter proposals no agreement was reached. Further meetings are scheduled to take place.
Consideration is also being given to all bargaining units negotiating pay and conditions on a national basis.
Cummings Generator Technologies
Extensive negotiations have been held at site level to produce a plan to save the plant from a drastic reduction in staff and production, 500 staff reduced to 100, at the Stamford site. It also required proposals to reduce the gap between post and pre 2000 staff where there had been a 30% pay differential.
The proposals were for a five year pay deal from October 2010 to September 2015 and to move to a 3 Shift system over four days to five day working. The proposals made alterations to the shift premium providing for no premium for morning shift, 15% for evening shift and 24% for night shift but reducing to 22% in year three of the pay deal.
Overtime rates were also altered with longer flat rate time working until O/T rates applied. Then O/T premium would remain the same at 29%.
Holiday period shutdown would be moved from Whitsun week in May to Easter. The Summer shutdown to remain unchanged.
Recruitment, an additional 30 temporary agency staff would be taken on.
Following the acceptance of the proposals the company would invest over 6 million dollars in Stamford for automation.
Following a ballot of the membership the new agreement was accepted.
Diodes Zetex
A further meeting took place with the company and the Engineering Employers Federation at which it was noted that the NMI was not prepared to go ahead with supporting an industry wide body.
However, it was agreed to see if progress could be made on working together to improve standards with a group of companies under the auspices of the EEF which would have the effect of establishing industry “leaders” in improving best practice going forward.
FKI Pensions
Local site consultation has been ongoing over the proposed closure of the final salary scheme for all constituent schemes with the FKI Group Pension schemes. This includes companies such as Brush Electric, Brush Transformers, Brush Traction, Hawker Sidley and Bridon.
The company is offering a defined contribution scheme in its place but the level of pension provision in all the projections will substantially decrease the final pension. The company has refused to hold national level meetings to discuss possible savings to the DB scheme or, to consult on a national basis improving the DC scheme.
Following a national level meeting with Unite shop stewards the following proposals were agreed to be put to the group companies at each site. In considering the general thrust of the Group’s proposals it was generally felt that the proposals:
- reduced Companies’ future service contributions by around 50% which was too much and would diminish benefits by an unreasonable amount;
- shifted too much of the risk of future pension provision onto the members
The general preference of members was to retain a defined benefit pension, as this gave members a greater degree of certainty as to what their future pension would be. However, it was recognised that in order to persuade the Company to maintain a substantial DB Scheme it may be necessary to consider changes which reduce future service costs and which reduce the degree of risk to which the Group was exposed
The changes outlined below would, in my opinion, reduce the future service cost to the Companies by approximately 25% and reduce the risk from future liability growth by approximately 50%, while maintaining the cost to members at current levels.
Outline of possible revised DB
- one DB benefit structure for all DB members
- delivering significant savings in administration
- CARE with RPI revaluation capped at 5%
- reducing the past service deficit and future service cost
- eliminating the risk that future pay rises would add to past service liability
-reducing benefit/liability by 40%
- Contracted-in to State Second Pension
- The State Second Pension would supplement the Company pension reducing accrual loss to c. 15% for a typical member
- Pension calculated on Basic Pay
- a standard definition would need to be agreed
- 5% contribution plus 1.6% extra NI
- intended to broadly match the current 7% member contribution level
Improvement in the Group proposals
Unite also discussed some of the negative impacts of closure and the shortcomings of the DC Scheme proposal. While members’ preference is to retain DB, we considered proposals intended to limit losses on past and future service benefits and a measure of compensation for loss of a DB pension.
It was the view of the trade unions that the package of changes outlined below would lead to a future service cost for the Company of a similar cost to the DB alternative outlined above i.e. it would reduce Companies’ future service costs by 25% rather than the near 50% reduction their proposals suggest
- Deferred pension increases based on RPI to maximum 5% and minimum 3%
- extending current best practice to all ‘active/deferred members
- Deferred DB benefits paid unreduced in the event of ill health
- not acceptable for reductions to apply whilst actives are still employed
- in DC there is no valid reason not to pension variable pay
- Extra tier of matching 5.5% employee – 8% employer
- improving company contribution and rewarding members who maintain current contribution level (5.5% = extra NI = 7%) of 7%
- Double contributions in year 1 for DB members signing up
- to incentivise members to join and accept change, a limited compensation
- Prospective DC contributions to SPA paid as supplement to fund on ill health
- replacing prospective service credit in the DB pension calculation
- Extra x2 lump sum on death in service for members with dependants
- replacing prospective service element in the DB dependants pension
- Amalgamation of DB and DC benefits at retirement for tax free cash
- minimise the position of members having to sell DB pension for cash while at the same time using DC cash to buy pension
- allowing many members to take all DC fund as tax free cash
Discussions are ongoing at both site and national level meetings.
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