Diageo UK workers balloted in pension row

Trade union GMB Scotland has accused Diageo of “shameful corporate greed” and is balloting 1,500 members employed by the drinks giant over its potential pension cuts.

Diageo has been accused of “shameful corporate greed” by GMB Scotland

Last month, Diageo confirmed that up to one third of its workforce – 1,700 employees – could be affected by changes to its final salary pension scheme.

The Smirnoff vodka 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.

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 decided 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.

However, Diageo has stressed that “many options” are open to employees who are set to be affected.

“At this point no decisions have been made and we will continue to discuss the options with employees and their representatives,” a Diageo spokesperson said.

GMB Scotland has now launched a consultative ballot of 1,500 members who work at the company, arguing that the changes could “leave them considerably worse off, costing them a combined total of £30m per year”.

The ballot will run for three weeks and will ask GMB members what measures they are willing to take to fight the cuts.

The union believes Diageo plans to move workers to a new scheme with “inferior terms”, while new employees “will be placed on an inferior scheme all together”, resulting in what it warns is a “race to the bottom for Diageo pension provision”.

“Once again we see an employer happy to end its employees’ chance of a decent retirement while bloating its bosses’ bank balances,” said Liz Gordon, GMB regional officer.

“It’s only because of the hundreds of hardworking staff employed at Diageo that it has managed to generate such financial successes, and now the company intends to reward their hard work with further cuts to their pensions.

“Diageo CEO Ivan Menezes has a rewards package that amounts to £3.5m a year including £458,000 in pension contributions and yet when it comes to cuts it’s the workers who are at the sharp end once again.

“It’s time to say enough is enough which is why GMB is balloting members to see what action they are willing to take to stop workers paying the price for shameful corporate greed.”