Tata Steel shines on resolution of UK subsidiary’s union issues

Tata Steel UK has reached an agreement with trade unions on several proposals that would structurally reduce risks and help secure a more sustainable future for its UK business. The company will next week start consultation with its employees on a proposal to close the British Steel Pension Scheme to future accrual.

Employees would be offered a competitive defined contribution scheme. The proposal on pensions and other changes in the employment terms are part of the ongoing transformation plan that the business is undertaking. 

As part of the agreement, all parties will work towards making Tata Steel UK a sustainable business. The company and trade unions have also agreed on the principle that subject to the structural derisking and delinking of the British Steel Pension Scheme fund from the business, Tata Steel UK will continue the existing blast furnace configuration in Port Talbot until 2021. Further, based on achieving the necessary financial performance and cash flows as per the transformation plan of the UK business, it will continue to invest across the UK sites to enhance the competitive position of Tata Steel UK in the European steel industry. 

The share price of Tata Steel increased 4.44 per cent on the bourses in early trades and is trading at Rs 429.6 on intra-day basis.