Changes to the Alliance Boots Pension Scheme

On 1st June the PDA Union wrote to Stefano Pessina Executive Chairman Alliance Boots on behalf of its members, expressing concerns in his company's approach to minimising its pension liabilities by using an unusual tactic to close down the Boots final salary staff pension scheme.

Boots would have been unable to make changes to the pension under the existing rules of the scheme, so instead it has required Boots employees to move their employment to a new Boots management company and with this change, they have now created an opportunity to vary the terms of the pension scheme. The Union can see no other reason why such an organisational change has been proposed.

John Murphy General Secretary of the PDA Union has expressed a view that the approach currently taken by Boots has had the effect of not using the TUPE regulations for purposes for which they were intended. He says in the letter;

Protection of Employment legislation (TUPE) is designed to protect employee's rights [when they move to another employer], not to provide employers with a method of circumventing other obligations or commitments

Furthermore he considers that Boots has used the economic downturn as a pretext for reducing its costs and proposing to transfer all the risk of the new pension scheme to its employees.

Not only has the approach been highly unusual, it is the Union's view that the company had a number of alternatives that it could have proposed including sharing the risk with the scheme members but originally proposed the minimum it was required to do legally despite nearly £1 billion profit in the last financial year.

The letter also points out to Boots that the Union thinks it has issued misleading statements about why the changes are being put into effect, the affect those changes will have on accrued benefits and the level of contribution Boots will provide under the new scheme.

Boots employees have already given feedback to the Union that questions raised as part of the consultation process have not been adequately considered or responded to. The Union has significant concerns about how Boots handled the consultation process making it clear that it believes that the company appears to have made final decisions ahead of the completion of the process.

The Union has requested the opportunity to discuss the points raised in the letter with the Company and has asked to be involved in the ongoing consultation process on behalf of its members. Failing that it will be advising its members on how to proceed and has informed Boots that it reserves the right to challenge both the use of TUPE transfers and the consultation process, whether this be through legal channels or in parliament. A formal complaint has already been submitted to the pension's ombudsman.

John Murphy expressed his disappointment at developments since writing the letter when he said,

The evidence would suggest that in the way they are requiring employees wishing to join the new pension scheme by 25th June and in doing so to confirm that their agreement to the closure of the final salary scheme that they [Boots] are determined to railroad through their proposals regardless.

The PDA still awaits an acknowledgement of the letter from Mr Pessina.

ENDS

Notes for Editors

About the PDA Union

The PDA Union was formed on 2nd April 2008 and currently has in the region of 15,000 members. The Union is open to pharmacists, pre-registration graduates and pharmacy undergraduates, but excludes directors of pharmacy companies, superintendents of pharmacy chains greater than ten shops and owners/proprietors of pharmacy businesses.

Its main objectives are:

• Where appropriate, to be recognised by employers for the purpose of regulating the relations between the staff of the employer and the company, through negotiation and consultation, and where appropriate, the provisions of the Information and Consultation of Employees Regulations 2004
• To protect the terms and conditions of the members individually (or collectively), and where appropriate, secure adequate remuneration for their services and improvements in their conditions and material well-being
• To represent, defend and support the interests of members, either individually or collectively, in respect of their terms and conditions, when dealing with employers and/or outside organisations
• To provide such benefits, representation, legal and other services, and assistance to its members who were members at the time of the termination of their employment, as the Executive Committee shall consider appropriate and practical

Editors requiring further information should contact:

John Murphy - General Secretary

Mark Pitt - Assistant General Secretary (Tactical)

Ms. Orla Sheils - Union Official

Tel: 0121 694 7000
Fax: 0121 694 7001
E-mail: enquiries@pda-union.org