Grangemouth refinery strike to go ahead

London - INEOS and the Unite trade union have failed to reach agreement in talks at arbitration service ACAS to avert a two-day strike at the company’s Grangemouth refinery. Due to safety issues, the strike on 27–29 April could effectively close the plant for a month and hit UK fuel supplies and the wider industry, though the negotiations have produced some compromise on this front.

"Although the parties have not come to an agreement, time has been spent addressing the issue of the safety and integrity of the Grangemouth site. An agreement covering these issues has been reached for the period of the dispute," said a 23 April statement from Acas.

INEOS had written to all 1350 Grangemouth employees asking them to accept a new set of revised pension proposals. The company has also urged the union to keep open a deep-water jetty and allow tankers to supply Scotland’s fuel during dispute. This would require the union to allow some of its members to operate the jetty and keep open parts of the plant.

“The union’s planned strike could have significant consequences for Scotland and the north of England and we would urge them to work with us to find a way of resolving this issue,” said INEOS CEO Tom Crotty, in a 20 April company statement.

Meanwhile, INEOS is preparing for a total shutdown of the refinery and petrochemical plant by next Friday to ensure that the facility is as safe as possible during the strike, which centres around INEOS’ plans to change its pensions scheme. The company said that the pension scheme currently absorbs over 25% of money spent on Grangemouth employees and that this figure could rise to almost 50% in future.

In its revised offer, INEOS is proposing to retain a final salary scheme for all existing members, paying 1/60th salary for every year worked, but wants to introduce a 6% employee contribution, phased in over the next six years. Future new employees would have to contribute significantly more to their pension, though, said the company, its typical salary package for a qualified technician is stil highly attractive at almost £60,000 a year.

For its part, Unite has accused INEOS of stripping £40 million of assets from the employee pension scheme, which, it said, requires only £16 million a year employer funding. The company, it added, has already started reducing its contributions to the scheme and reduced certain benefit against the wishes of the pension scheme members.

Linda McCulloch, Unite national officer said: “Grangemouth alone makes up to £3 million profit every per day yet INEOS is proposing to make changes to its' pension scheme that will reduce our members' pension pay outs by an average £10,000 per year. This scheme is affordable and well funded. There are no excuses for the company's actions.”

INEOS is the largest privately owned chemical business in the UK and the fourth biggest in the world with a turnover of £45 billion per year. The company acquired the Grangemouth site from BP in October 2005.