Tata Steel workers to benefit from improved redundancy conditions

Tata Steel has announced 2,500 job losses, and the government has improved redundancy conditions for Port Talbot Steelworkers.

The ministers, Tata Steel, and the trade unions reached an agreement to provide a better redundancy package and a skills package to employees who wish to earn money while retraining.

This follows Tata’s decision to close two blast furnaces on its Port Talbot facility in January, which put 2,800 jobs at stake. Tata claimed that the deal would secure steelmaking at Port Talbot, and maintain 5,000 jobs. The first furnace shut down in July and the second is expected to close within weeks.

The agreement goes further than previous agreements. It includes a minimum voluntary pay-out for redundancy of PS15,000 plus a PS5,000 “retention” payment. Also included is paid-for-training to provide workers with a stable income and prepare them for future jobs.

Jonathan Reynolds, the secretary for business and trade, said that Port Talbot was and always will be a steelmaking city. This deal gives hope to the future of South Wales’ steelmaking.

Steel is essential to the UK economy, its sovereignty and its communities. But previous government inaction blighted the industry. This is why the government has taken strong action with a new strategy and deal that will reverse the stagnation of the steel industry and establish a vision for a sustainable and bright future.

We know that a cleaner and greener future is essential for the long-term stability of UK steelmaking. Our steel strategy will present a positive future for the industry, supported by the PS3bn government investment pledged in our manifesto.

Greg Smith, the shadow minister for business and trade, responded to Reynolds’ remarks in the House of Commons: “Today’s deal means that 100% of Port Talbot’s output is gone. An electric arc-furnace will take – at most – five to seven years to start up. Some say it could be eight to nine before we even see a new job, if any are created at all.”

Tata redundancy term

Tata offers staff who are at risk of being forced out a comprehensive programme that provides recognised qualifications for sought-after skills.

The first month of training will be paid in full, and then PS27,000.00 per year over the next 11 months. Tata Steel will cover these costs, and also expects to create at least 500 jobs in support of the construction.

Employees leaving the company will receive a minimum redundancy of PS15,000, pro-rata. They will also receive a retention payment of PS5,000. Reynolds has stressed the importance of reducing compulsory redundancies wherever possible. Last month , 2,000 employees expressed an interest in voluntary redundancy as part of this deal.

Tata offers employees who opt for voluntary redundancy up to 25 years of service 2.8 weeks of pay per year.

Union Reaction

In a joint statement, the Community and GMB unions stated: “This is not a deal to celebrate but with the improvements that the unions have negotiated and the government has implemented it is much better than the disastrous plan announced by Tata in September 2023.

“Through [the Memorandum of Understanding] discussions, unions were successful in securing concessions, including a comprehensive skill and retention program, and extensive commitments to investment. We are grateful for the Labour Government’s intervention, which helped to reinforce and secure the terms of the Memorandum of Understanding.

“This is clearly not where we wanted it to be and we knew that there was a better option available.” Community and GMB released the Multi-Union Plan in November of last year. This alternative plan would have protected Port Talbot’s steelmaking industry and ensured a just transition to the workforce. Unfortunately, we were unable to secure the support of every stakeholder for our credible alternative strategy of decarbonisation. The company ultimately rejected our proposals and it was a tragedy that this opportunity had been missed.

“Under these circumstances, representatives from all steel unions decided to negotiate the best deal possible and then put it up to a vote of the members. We have already done this, and the voting process is in progress. The MOU will be decided by our members, and we will take the next step together based on the results of the votes.

Unite General Secretary Sharon Graham stated: “The commitment of the government to fund steel in South Wales over a two-stage period is essential for the local communities as well as the future of the industry.

The last government was slack at the wheel. The current crisis is directly related to the failure of the previous government to invest in UK steel and to allow the companies to let their operations run down and fall into disrepair. Conservative inaction has resulted to completely avoidable job loss.

“Unite, which secured the additional funds, will ensure that substantial second-stage investments in South Wales will mean new jobs are available and secure Port Talbot’s and Llanwern’s future.” Tata must now present the second-stage proposal to increase steel capacity at South Wales sites. A jobless transition cannot occur under our watch.

The government will continue to contribute PS500m to the project. The grant agreement contains “watertight” terms that will allow the government to recoup its investment if Tata Steel fails to meet its obligations. The government will be able to recover investment if Tata Steel fails to meet its commitments.

Tata Steel is also releasing 385 acres for redevelopment. This valuable property will bring in new employers from other sectors, as well.

Reynolds announced that a new steel sector strategy would be published by Spring 2025, after consultations with the industry and other stakeholders.

Redundancy support

Tata Steel announced last week that LHH, a talent solutions provider within the Adecco Group and part of its Talent Solutions division, had been selected as the outplacement partner for the company to help support employees in the transition to low CO2 steelmaking.

Chris Jaques said, Chief HR Officer for Tata Steel UK: “The Review Team was really impressed with the experience and level of support that LHH could offer. This will be an important part of the process of transition.” We want to make sure that all employees affected by this transition receive the necessary support.

Staff affected by the changes will be able to attend workshops on how to best conduct a job hunt, receive support in writing a CV and preparing for interviews, as well sessions for staff who are looking to retire. These sessions will be tailored to the departments, their roles and individual skill sets within each team. Portals, which will allow staff to access workshops and resources digitally in addition to the on-site support, will be created.

JC Townend said, “We are prepared to support impacted employees of Tata Steel UK.” We will have a team of outstanding people on the ground who will get to know employees on an intimate basis, so that we can meet their needs best through workshops, skill building, and one-toone coaching support.

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