Tata Steel Faces Industrial Action Ballot in Pension Row

London: Tata Steel's proposal to close the British Steel pension scheme has trade unions up in arms, which on Monday announced an industrial action ballot against the company's decision.

An industrial action ballot or vote is sought by unions to know the majority view of its members about participating in the action - strike, lock-out and action short of a strike.

A decision is then taken on the basis of the results of the ballot.

"Steel unions GMB, Community, Unite, and Ucatt have announced that Wednesday, May 6, is the date they intend to open an industrial action ballot over Tata Steel's proposal to close the British Steel pension scheme (BSPS)," according to a joint statement by the unions.

The statement said the ballot will start from May 6 and is expected to end on May 29.

"All the unions are working together to defend our members' pensions. There can be no doubt about the strength of feeling among employees in opposition to Tata Steel Europe's unnecessary and unjustified decision to close the British Steel pension scheme," Unite national officer-steel Harish Patel said.

The company plans to keep in abeyance the existing pension scheme, which is likely to hit 17,500 existing workers and over 90,000 pensioners.

There have been reports that the suspension will help Tata save 1 billion pounds.

Negotiations between the trade unions and the company that started in November last year, broke off without any agreement.

The unions further said, "We are continuing to take legal advice and make preparations to ensure that the ballot meets all legal requirements and cannot be challenged by Tata."

The company has proposed to replace the existing British Steel pension scheme with a 'money purchase' pension scheme, in which employees, the government and the employer will make definite contributions.

However, the unions did not accept it on the ground that "it would bring more burden on the employees".

Tata Steel has invested 1.2 billion pounds in its UK operations since acquiring Corus in 2007.