The court ruled that the firm's parent company Agco, the US agricultural machinery business, can reduce the pensions of workers at its Coventry site, which is due to close in two weeks, because they are retiring early.

The ruling overturns a High Court ruling in December last year, which said the workers should get a full pension because they were being made redundant.

The Transport and General Workers Union said it was "astonished" by the ruling, which also means the workers can not appeal to the House of Lords.

Payments slashed

Agco can now cut the value of a worker's pension by 6% for every year they retire early by.

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In practice, it could mean someone who was 55 when they were made redundant could see the value of their pension cut by up to 60%.

They will still have the option of deferring taking their pension until they are 65 and retiring on their full entitlement.

Peter Booth, of T&G said: "This is an astonishing ruling which appears to go against the spirit and letter of the pension fund rules.

"It is a poor decision for our members and one that we cannot understand. It is very difficult to see how the Appeal Court has overturned the ruling in the High Court when they essentially had the same evidence."