Plans by Unite to plug a multi-million pound pensions black hole have sparked a backlash from staff, HuffPost UK has learned.
Employees were informed last month that the union wanted to replace their final salary scheme with a less-generous career average (CARE) model.
Their retirement age would also be raised from 63 to 65 under the proposals.
But it has now emerged that the union’s own general secretary, Sharon Graham - who took over from Len McCluskey last year - is leading moves to save the final salary scheme.
The row emerged the day after HuffPost UK revealed that Unite is facing a £70m loss over a controversial hotel and conference centre it built in Birmingham.
One union source said: “The pensions situation is another example of Sharon having to clear up the mess she inherited from her predecessor.”
In a letter sent to Unite staff on January 28, Peter Hughes, the union’s acting head of administration, said ending the final salary scheme was a necessary move.
He said: “We are proposing the following changes in order to meet the increased cost of the Scheme and to ensure that the Scheme is funded. We believe that the proposals set out below best meet the members’ interest within the given constraints.”
However, the announcement led to a revolt from the union’s employees - including its boss, Sharon Graham.
An email sent to staff on February 4 by senior official Chris Stiles, a close ally of Graham, said: “There is incorrect information going around that the general secretary is proposing a CARE scheme (career average) as a solution to the pensions issue. This is totally untrue.
“Sharon is absolutely against the CARE package. To be clear, the general secretary does not think the CARE package is the solution, nor does she think we should raise the retirement age. Sharon’s aim is to keep a final salary scheme and this is what she is fighting for.”
A consultation process is underway until March 28, and then Unite staff will be balloted on how they want to proceed. It is understood, however, that Graham’s plans to maintain the final salary scheme have widespread support.
A Unite source told HuffPost UK: “Sharon has been very clear that she believes a properly-funded final salary scheme is the best way forward.
“After taking over from the previous regime, she is intent on cleaning out the stables.”
A Unite spokesperson said: “Sharon Graham has inherited a pension deficit that should have been dealt with following the 2020 evaluation but had not been.
“Sharon Graham is now dealing with this deficit and has proposed a formula that would keep the final salary pension scheme and close the deficit.”
Last week, Graham threatened to withdraw all of the union’s remaining funding from the Labour Party over a pay dispute involving bin lorry drivers in Coventry.
Unite currently pays £1m to Labour as an affiliation fee, plus thousands pounds more in political donations, making it the party’s largest funder.
A Labour spokesperson said: “These sort of threats won’t work in Keir Starmer’s Labour Party. We would have hoped that Unite would have got the message that the Labour Party is under new management.”