STEEL unions have started balloting their members on a redundancy package that could lead to thousands of job losses in south Wales, following a restructuring deal reached with Tata Steel.
The three unions representing steelworkers – Community, Unite, and the GMB – have finalised an agreement with Tata Steel, addressing severance terms and the future of steelmaking operations. The deal follows months of negotiation, with union leaders stating it was “the best that can be achieved” under the circumstances.
Tata Steel, which has been grappling with significant financial losses and a push towards reducing carbon emissions, has already closed one of its blast furnaces in Port Talbot in July, with plans to shutter the second furnace by the end of September.
The company has long maintained that its blast furnace operations were unsustainable, losing £1 million per day. In its place, Tata has committed to a £1.25 billion investment in a new electric arc furnace, a move it says will bring greener steelmaking to south Wales.
Union leaders Roy Rickhuss and Charlotte Brumpton-Childs, the general secretaries of Community and GMB, informed members that the company’s proposals would “reduce capacity and slash jobs,” but emphasised that the unions had secured enhanced redundancy terms and commitments on future investment.
Key elements of the agreement include improved redundancy terms, a skills and retraining scheme, and guarantees to protect downstream operations. Workers will receive 2.8 weeks’ pay for every year of service, up to a maximum of 25 years, with a minimum payout of £15,000 and an additional £5,000 linked to attendance.
More than 2,000 employees, most of whom are based at Port Talbot, have already expressed interest in taking voluntary redundancy. Tata Steel aims to cut 2,500 jobs during the current round of redundancies, with a further 300 positions expected to be eliminated in the future.
In a statement, Mr Rickhuss and Ms Brumpton-Childs stressed the urgency of balloting members now, as the closure of the second blast furnace looms. The vote is set to close on 16 September.
Additionally, an agreement has been reached between the UK government and Tata Steel, which is expected to confirm the previously promised £500 million grant to support the new electric arc furnace. Further details of the government’s involvement are expected to be announced later this week.
This restructuring marks a pivotal moment for the UK’s steel industry, as Tata Steel shifts its focus towards sustainability at the cost of thousands of jobs in an already economically fragile region.
