TALKS have started between Tata Steel and the trade unions on the Scunthorpe works over further cost savings to pave the way for the company’s takeover.
Potential new owner Greybull Capital is set to take control of the business in April as part of a £400-million deal.
But it is understood, further savings are necessary to ensure the business is sustainable.
Unions say discussions are at an early stage, but some steelworkers told the Telegraph they fear a pay cut could be one of the cost-saving measures proposed.
However, Tata Steel said no steelworkers have been asked to take a pay cut.
Martin Foster, convenor for the site’s Unite trade union, said: “We are in the early stages of discussions regarding cost savings.
“At this moment we have no firm proposals to put to our members.”
Tata Steel has already imposed a pay freeze on the 4,000 employees in Scunthorpe for 2016-17.
Now some steelworkers fear the company is seeking a pay reduction – possibly as high as 10 per cent.
A company spokesman said workers had not been asked to take a pay cut.
He added: “We do not discuss in public the terms and conditions of our employees.
“It is a matter between the company, the management and the trade unions.”
Greybull also declined to discuss the pay-cut speculation, insisting it was a matter for Tata Steel.
Tata Steel this week confirmed agreement had been reached with the unions in Scunthorpe over dropping quarterly and annual bonus deals negotiated in 1980.
Those schemes will be replaced by a new annual profit-related bonus to be paid from January 1 this year.
Union leaders are also to start talks with Greybull over the introduction of a new defined contribution pension scheme – meaning steelworkers will have to work beyond the present pensionable age of 55.
Earlier this week, Tata Steel bosses and the trade unions were in closer harmony as they joined together in a mass march and lobby in Brussels.
They were among 5,000 protesters calling on the European Union to impose duties on cheap imported steel from China.
Both sides agreed their march on the Belgian capital had been a success.
But it could be some time before they know whether it will have the desired effect.
For the British Government has put an obstacle in the way by refusing to support moves to impose tariffs on Chinese steel imports.
Roy Rickhuss, the leader of the Community trade union, said: “The UK government has a lot to answer for and should be doing more to stand up for UK steel in Europe and around the world.
“But instead of showing leadership in Europe they are blocking tougher penalties for steel dumping and backing market economy status for China.”