The tobacco company JTI has rejected a trade union plan to save 500 jobs at the Gallaher cigarette factory site in Northern Ireland.

Unite, the union representing most workers at the plant at Lisnafillan, just outside Ballymena in Co Antrim, confirmed on Wednesday that the Japanese owners plan to end production there by 2017.

Overall 800 jobs will go at the factory even though the unions had proposed new working conditions and up to 300 voluntary redundancies.

Jimmy Kelly, Unite’s regional secretary, described JTI’s attitude to the rescue plan as “contemptuous”.

Kelly said: “This counter-proposal would have seen more than 500 jobs saved by transforming the factory into a centre of excellence for pouch tobacco and cigar manufacture. It was overwhelmingly endorsed by our members who agreed to a range of cost savings impacting their terms and conditions in order to save employment at the site. The proposal had been backed by politicians across the board including by the first minister, Peter Robinson.

“JTI rejected our counter-proposal as they have a strategic long-term goal of shifting employment from western to eastern Europe. This decision is an extreme case of ‘social dumping’ where employers seek to minimise costs through chasing lower-cost alternatives. The workforce at Lisnafillan is highly skilled, experienced and motivated. This is the wrong decision.”

Jim Nicholson, the Ulster Unionist MEP, said he was dismayed by JTI’s rejection of the union proposal.

“This is a huge blow to the factory workers, for the Ballymena area, for the Northern Ireland economy as a whole and for all those who have worked so hard to try and secure a future for the plant.”