Thyssenkrupp steel workers back labour plan ahead of Tata deal

* Agreement foresees no forced layoffs until Sept. 2026

* Approval key step in creating Thyssenkrupp (IOB: 0O1C.IL - news) -Tata Steel JV (Recasts, adds official confirmation, Thyssenkrupp comment)

By Tom Käckenhoff

DUESSELDORF, Feb 5 (Reuters) - Steel workers at Germany's Thyssenkrupp voted on Monday in favour of a labour agreement that will safeguard jobs and plants in a planned joint venture with Tata Steel (BSE: TATASTEEL.BO - news) until 2026, removing another key hurdle for the tie-up.

Although not essential to the creation of the planned joint venture, workers' approval of the labour agreement is seen as a precondition to getting the deal done as it removes the risk of strikes and potential delays.

Thyssenkrupp and India's Tata Steel in September unveiled plans to merge their European steel operations and create Europe's second-largest steel group behind ArcelorMittal (LSE: 0NSF.L - news) , leading to speculation of significant job cuts.

As a result, Thyssenkrupp management and labour representatives struck a deal before Christmas which foresees no forced layoffs or major site closures until Sept. 30, 2026, which was seen as a major victory for unions.

About 20,700 members of German union IG Metall had been asked to vote on the agreement, the union said, adding that of the 71 percent who participated in the ballot, more than 92 percent voted in favour.

"These were tough negotiations with a good results, and it was confirmed by this members' vote," said Knut Giesler, head of IG Metall in North Rhine-Westphalia, where Thyssenkrupp is based.

Thyssenkrupp and Tata have said the deal will help them tackle overcapacity in Europe's steel market, which faces cheap imports, subdued construction demand and inefficient old plants.

They have announced 4,000 job losses as part of the tie-up, split equally between the European operations of the two companies, but Thyssenkrupp has said it aims to implement the cuts without forced layoffs.

"The members of IG Metall at the steel sites have decided by a clear majority in favour of the collective agreement and this will give the planned joint venture a strong future," Thyssenkrupp board member Oliver Burkhard said in a statement.

IG Metall made clear the vote solely referred to the labour agreement, not the joint venture as a whole, and pointed to outstanding assessments by external auditors over whether the deal is in the best interest of workers.

The joint (Frankfurt: 1JO.F - news) venture still needs to be approved by Thyssenkrupp's supervisory board and Chairman Ulrich Lehner could in theory use his casting vote to get the deal through should all labour representatives be against it.

"The decision over the merger can only be made in the supervisory board of Thyssenkrupp AG and the consent of the labour side is not at all a done deal," said Markus Grolms, vice chairman of Thyssenkrupp's supervisory board. (Writing by Christoph Steitz; Editing by Victoria Bryan and Mark Potter)