Corus workers are upset with Tata Steel's gesture of handing out a bonus to employees in India, while giving those in the UK a miss.
Community Union, which represents the majority of workers in Corus, termed the act hypocritical as it prepared for a confrontation with the management on several pay-related issues.
While Tata Steel pays an annual bonus in India, Corus pays a quarterly bonus. According to the union, the bonus was due in July but was not paid. "The hypocrisy is staggering as Tata Corus unilaterally withdrew bonuses disregarding contracts of employment and 30 years of custom and practice. Tata, it appears, will respect tradition in India but not in the UK," Michael J Leahy, general secretary of Community Union, said.
The union said based on long-standing contractual and procedural agreements dating back to the early 1980s, bonuses were integral to take-home pay.
When contacted, a spokesperson for Corus declined to comment. "Talks are still going on. So it will be inappropriate for us to comment," the spokesperson said.
The development comes shortly after the representatives of all unions that make up the National Trade Union Steel Co-ordinating Committee (NTUSCC – comprising Community Union, Unite & GMB) voted to ballot for "industrial action" — which includes possible strike — over Corus's proposed changes to the pension scheme.
The Corus management has decided to close the British Steel Pension Scheme for entrants but delayed the execution so far.
"Members have seen thousands of job losses across Corus, their bonus has been removed unlawfully and now the company is attacking their pension. Corus should be fully aware that the unions are saying enough is enough," the statement said.
The immediate provocation for the union, it seems, is the September 16 announcement by Tata Steel to pay bonuses to Jamshedpur employees at the rate of 18.5 per cent of the salary/wages (basic + DA) for the year 2008-2009 along with an ex-gratia payment of 8.33 per cent on arrears.
Most of the employees of Tata Steel are not eligible for bonus, under the Payment of Bonus Act, 1965, but the company paid bonus to all unionised employees.
Sources, however, argued that the ire of the union was unfounded as the employees at Corus and Tata Steel both received bonuses for 2008-09. While Tata Steel's Indian operation is a hugely profitable one, the Corus business, acquired in early 2007, suffered a loss in the last quarter. But the union said Corus/British Steel had paid bonuses during losses in the past.
September 30, 2009 / Telegraph