Members of the distressed Carillion pension scheme should have “protection and guarantees” from the government, according to the RMT Rail Union.
Crisis talks are underway between the government, banks and the construction firm in order to determine how best to solve the company’s current £587m pension deficit.
Carillion, currently one of the government's largest contractors, is currently working on the HS2 rail link and recently signed a contract with Network Rail’s Midland Mainline, but according to its 2017 financial interim results, the firm expected a full year average net debt of £850m.
RMT Union general secretary, Mick Cash, said: "The union's absolute priority at this stage is our members' jobs and their pension rights. The workers caught in the middle of this financial meltdown at Carillion are not responsible for the crisis.
“They should have protection and guarantees from the government including an assurance that operations will be directly transferred over to Network Rail with all jobs, pensions and rights safe guarded if Carillion goes bust. That is the very least we would expect.
Cash added that this is the high risk gamble you take when handing infrastructure projects to “speculative" private companies and that ministers must take immediate responsibility for workers “caught in the cross fire” and give “assurances without any prevarication”.
A TPR spokesperson said they are closely involved in discussions with the firm and the trustees of the Carillion pension scheme, as the situation unfolds, but would not comment further at this time.
A PPF spokesperson said: “The PPF is aware of the discussions between the company, government and banks and, along with the trustees and The Pensions Regulator, will act as it always does to protect the interests of Carillion scheme members and levy payers.”
Unite, which represents over 1,000 workers at the company, echoed calls from the RMT Rail Union, urging the government to "consider all options" if Carillion requires state assistance to survive, including bringing public sector contracts back in-house.
In a statement, Unite assistant general secretary, Gail Cartmail, said: “The Carillion crisis has become a major story but it must not be allowed to go over the heads of its loyal workforce, who are effectively being held hostage by the whims of the market.
“Carillion can’t keep its workforce in the dark any longer it needs to clearly tell them and their union representatives, how they are trying to overcome the current problems, with an honest assessment of what the future holds.
“The huge pension deficit is a further worry for the Carillion workforce as well as their jobs being potentially on the line, they have also discovered that their pensions, which they have saved for, could be at risk.”
According to the Financial Times, senior ministers from across the government held talks yesterday, Thursday 11 January 2017, on the current situation of the construction firm.
Cabinet Office minister David Lidington met with senior officials including Business Secretary Greg Clark, Transport Minister Jo Johnson, Chief Secretary to the Treasury Liz Truss and Justice Minister Rory Stewart, in addition to the ministers from culture, health, education and communities department as well as the foreign office.
The scale of the meeting highlights the scale of Carillion’s plight, as they battle to save 19,500 jobs currently located in the UK.
On Wednesday, Carillion met with a number of its lenders and advisers in Canary Wharf to discuss a revised business plan for the future, and in December the firm announced that it had agreed with its financial stakeholders to defer the test date for both its financial covenants until 30 April 2018.
It its 2017 interim results the firm reduced its net deficit by £80m from the end of year 2016 and were having “positive” and stated it was having "positive" ongoing discussions on a move from RPI to CPI.