ENGINEERING firm NSK is facing a costly damages claim from workers suing for unfair dismissal.

The Northern Echo has learnt that 27 former production staff at its steering column plant in Palmer Road, Peterlee, County Durham, have brought a case against the Japanese firm.

The workers were told earlier this year they were being made redundant and offered jobs half-a-mile away at a neighbouring plant.

But they were shocked to learn that if they were re-employed, their pay would be cut from £8.30 an hour to £5.40.

NSK's Steering Systems Europe arm has been hit by cutbacks at Nissan and is transferring operations to its Doxford Drive plant, which makes electric power-assisted steering systems.

Jeff Morland, divisional officer with Amicus, said: "We have been successful in maintaining high wages at the Palmer Road factory for a number of years and we have to ask whether we've priced ourselves out of these jobs.

"If the company does not succeed in convincing everyone that there was a dire business need in making this move, they will end up losing the case and have to fork out more money.

"All of the jobs in question at Palmer Road were not redundant and these people should have been allowed automatically to transfer with their wages and conditions intact."

A directions hearing was held in Newcastle on Tuesday and it is expected the case will be heard in full next year.

NSK human resources manager Damian Pearce said: "There are a number of people putting in a claim against the company for unfair dismissal as a result of the closure of the plant at Palmer Road.

"We are completely happy that we have done everything in a correct and professional manner."

NSK Steering Systems Europe has been carrying out a lengthy review of its manufacturing operations in Europe, which has led to a number of restructuring moves.

The company's Bearings Europe business, which is also based in Peterlee, announced it was shedding 95 jobs last month in a separate move.