Union hails MSP support in Diageo pensions row

Trade union GMB Scotland has “warmly” welcomed the support of Central Scotland MSP Richard Leonard for its campaign against Diageo’s proposed pension changes.

Central Scotland MSP Richard Leonard has tabled a motion calling for Diageo to reverse pension plans

As a two week industrial action ballot of more than 1,500 members employed by Diageo gets underway, Leonard has tabled a motion calling on the drinks giant’s board of directors to reverse plans to close the company’s final salary scheme.

GMB has criticised Diageo after the firm recently increased its operating profits to £2.8 billion and CEO Ivan Menezes was awarded a 12% pay increase, taking his maximum earnings to £8.8 million.

Leonard calls for Parliament to: “believe that there is no other reason for this proposal other than the company cutting costs while enjoying an extremely healthy profit margin; recognise what it sees as the determined efforts of the unions, GMB and Unite, to represent their members at Diageo and secure pensions’ justice.”

Diageo’s UK final salary pension scheme closed to new members on 22 September 2005, but about 1,700 employees are currently covered by the plan.

The group chose to end the scheme as it was perceived as an escalating cost for a small part of the overall workforce whose life expectancy was collectively increasing.

The Johnnie Walker maker has been consulting with employees and their representatives since February 2016 as part of a review of its pension scheme and started formal consultations on proposed changes on 18 July in a bid to find “a long-term sustainable solution” which “manages risk and costs”.

Talks with conciliation service ACAS, and a rejection by consultative ballot of Diageo’s ‘final offer’, followed.

GMB Scotland organiser, Louise Gilmour, said: “Diageo is happy to significantly increase executive pay in the wake of billions of pounds of profit but they won’t protect the pensions of the workforce who have contributed massively towards the success of the business.

“This is another example of the obscene disparity between CEO remuneration and the ordinary worker, and if there is one company that can most certainly afford to sustain decent pension arrangements for workers, it’s Diageo.

“Richard Leonard’s intervention is warmly welcomed because we need to highlight in the Scottish Parliament that fat-cat pay and cuts impositions by multi-national companies remain prevalent in Scotland.

“This is simple question of fairness. Diageo can more than afford to help pay for a decent pension for its workers and we are calling for them to lift their cuts agenda and get back round the negotiating table.”

A Diageo spokesperson told The Spirits Business: “We have been in touch with Mr Leonard’s office and we are happy to engage with any stakeholders.

“We also remain committed to engaging with our people and their representatives and to returning to the consultation process we have been engaged in for the past nine months.

“The pension review is about finding a long-term sustainable solution on pensions which manages risk and costs.”