Remploy submits final modernisation proposals

Remploy, the UK's leading provider of employment services for disabled people, has today informed employees of revised proposals for modernisation of the company following lengthy consultations with trade unions. The proposals have been sent to the Secretary of State for Work and Pensions, who will scrutinise them before coming to a final decision.

In May this year Remploy produced a proposal to:

• Quadruple the number of jobs the company finds for disabled people in mainstream employment to 20,000 a year in five years' time
• Close 32 and merge 11 out of 83 factories
• Guarantee that no disabled employee would be made compulsorily redundant
• Offer all 2,300 affected disabled employees a job with Remploy, a mainstream employer or a social organisation, on their current terms and conditions
• Remain within a £555m government spending limit over five years

The Brynamman factory was proposed for closure and under the revised plan submitted for consideration by the Secretary of State, the site remains proposed for closure and employees will have the option to transfer to the Remploy factory at Neath.

Formal consultations with the trade unions began in May. During September and October, the negotiations were chaired by Roger Poole, who was brought in as independent chairman by the Secretary of State for Work and Pensions.

Bob Warner, Remploy Chief Executive, said: "We very much appreciated Roger's intervention which produced a constructive approach in the talks. We were able to find common ground with the trade unions on reduction in management costs and overheads, and changes in working practices which will produce additional savings giving a total of £59m over five years.

"Our ambitious revised plan assumes that we will increase annual income (sales less material cost) by 40 per cent over the next five years. This is challenging because it has remained static over the last 10 years.

"The trade unions have suggested that we should adopt a plan for 60 per cent income growth in one year and a doubling over five years. We believe that such growth is unrealistic and, if it was not achieved, would put the whole future of Remploy at risk."

Under the revised proposal:

• 55 factories would continue (increased from 40) subject to satisfactory progress towards an acceptable loss per disabled employee
• 11 factories would merge as before
• 17 factories would close (reduced from 32)

Mr Warner said: "Over the last six months we have carefully examined all the options for keeping the Brynamman factory open, but we have reluctantly reached the conclusion that it does not have a sustainable and secure financial future."

Under the revised proposal, disabled employees at the factory would be guaranteed the opportunity to remain on Remploy terms and conditions, including membership of the final salary scheme, at the Neath factory or working for another local employer. Alternatively they could chose to opt for voluntary redundancy or early retirement.

Mr Warner said: "The plan which we have submitted to the Secretary of State meets the goals set by the Government for us to support many more disabled people into jobs in mainstream employment, avoid compulsory redundancy of disabled people and remain within the £555m funding limit.

"The final decision rests with the Secretary of State. Ministers have committed to careful scrutiny of Remploy's proposals and there will be no factory closures without their agreement. We hope for an early decision to bring an end to the uncertainty facing our employees."

Notes to Editors:

• By 2012, Remploy will each year be finding more than 20,000 jobs for disabled people in mainstream employment in the UK
• Last year Remploy found more than 700 jobs for disabled people in mainstream employment in Wales
• Remploy Brynamman, which manufactures furniture, was opened in 1950
• Five years ago 35 people worked at the site and last year it employed 32, of whom 29 are disabled
• In the last financial year Remploy's furniture business lost £15.5 million, or £22,361 for each disabled employee

Further information:

Helen Wardle:

tel 02476 515851, 07984 434712

Shiona Williams:

tel 02476 515831, 07977 436141

E-mail:

pressoffice@remploy.co.uk

Web:

www.remploy.co.uk

Address:

Remploy Limited,
Stonecourt,
Siskin Drive,
Coventry, CV3 4FJ