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Philippines: After 5 years union continues fight against Nestle's illegal precarious employment practices

Five years after the Union of Nestle Workers Cagayan de Oro Factory (UNCWF) first exposed the company's use of illegal outsourcing arrangements, the union continues to fight for justice for casual workers and bring and end to precarious employment practices. While seeing labour only contracting as a direct threat to union rights, UNWCF is clear that this threat stems from abusive employment practices and not precarious workers themselves. So in calling for the termination of the contracts with companies that are producing Nestle products under labour only contracting, the union is also demanding that the workers exploited under these precarious employment practices must be granted regular employment.

At the end of June 2006, UNWCF, a member of the IUF-affiliated Council of Filipino Nestle Unions (CFNU), filed two position papers in the Court of Appeals against an unjust ruling by the National Labour Relations Commission which ignored extensive evidence presented by the union.

One appeal was filed against the National Labor Relations Commission, Nestle Philippines, ands COFIPAC Corporation and a second appeal against the National Labor Relations Commission, Nestle Philippines, FEDCON Construction Corporation and SCF General Manpower Services.

The extensive documentary evidence presented by UNWCF includes a Labour Department investigation in 2001 which confirmed the union's allegations that Nestle used three companies, COFIPAC, FEDCON and SCF General Manpower Services, as a source of labour-only contracting in direct violation of the Labor Code of the Philippines. In fact the 2001 Labour Department inspection report concluded that: "Regular employee(s) were paid more than what is required for by law. However, there was a labor-only contracting at the milk & coffee packing line supplied by FEDCON and SCF General Services, respectively;"

Other crucial evidence ignored by the National Labor Relations Commission in its decision against the union involves Nestle's own contracts with these companies:

a) a "co-manufacturing" agreement with COFIPAC which clearly demonstrates that COFIPAC did nothing but provide labour to Nestle, and all aspects of the production process were under the direct control of Nestle;

b) a "contract for general services" with SFC General Manpower Services from 1 January 1999 until the present not only involves illegal labour only contracting, but is clearly intended to prevent the regularization of workers and to exclude them from the union and CBA coverage.

The evidence shows that COFIPAC, with total capital of only US$300,000 was not an independent company that packed Nescafe sachets under contract, but was merely a labour agency. As the union's lawsuit explains:

"… machineries, tools, premises for refilling, packaging and repackaging are all owned by respondent NPI [Nestle Philippines Inc] and not by respondent Cofipac."

In addition:

"… respondent NPI [Nestle Philippines Inc] dictated co respondent Cofipac as to how many employees would be required to the requisitioned job and that the money paid these employees came from respondent NPI and the only participation of respondent Cofipac is simply to charge a commission over and above the amounts paid to the workers. Hence, respondent Cofipac is nothing more than a mere agent of respondent NPI. Respondent Cofipac simply facilitated the hiring of the employees."

In the case of Nestle's open-ended contract with SFC General Manpower Services, the scope of services include the following tasks according to piece-rates:

Activity & Rate
a. Receiving: P71.18 (€ 1.08) per metric ton
-scale weighing
-green coffee grading
-green coffee sampling
-sample roasting and splitting
-forklift operation

b. Cleaning and drying: P76.27 (€ 1.16) per metric ton
-coffee tipping
-rebagging
-utility sweeper
-forklift operation
-traffic controller

c. Block piling, re-palletizing, and van stripping/stuffing P25.42 (€ 0.39) per metric ton
d. Sack repair P1.47 (€ 0.02) per sack
e. Sack sorting P0.30 per sack
f. Block piling and palletizing of empty jute sacks P4.88 (€ 0.07) per 100 sacks

This kind of exploitation of casual workers on poverty wages continues until today. As the union's new appeal against Nestle Philippines and FEDCON clearly states:

"Even at present, of the ten (10) production filling lines for the milk production now in operation, six (6) of these filling lines are still being manned by contractual workers provided by respondent FEDCON while only four (4) are being handled by regular employees belonging to Appellant Union. The four (4) lines are mechanized whilst the six (6) involved manual filling."

As the union's legal position paper submitted to the Court of Appeals, it explains that the very reason that labour only contracting is illegal under the Labor Code is "to curb the practice adopted by unscrupulous employers to avoid regularizing their employees under Article 280 of the same Code."

In addition, Nestle Philippines is guilty of: "… circumventing the law on regular employment and thus preventing the contractuals from becoming regular employees who would have otherwise become members of Petitioner UNCWF under the CBA, thus eroding its bargaining strength and constituting unfair labor practice…."

In other words, by using FEDCON and SFC General Manpower Services to supply workers who were assigned to the same tasks as regular workers for the past seven years, Nestle Philippines has excluded these workers from union membership, denying them the benefits and rights provided in the CBA, and undermined the collective bargaining process itself.

While seeing labour only contracting as a direct threat to union rights, UNWCF is clear that this threat stems from abusive employment practices and not precarious workers themselves. So in calling for the termination of the contracts with companies that are producing Nestle products under labour only contracting, the union is also demanding that the workers exploited under these precarious employment practices must be granted regular employment:

"The Contracts are asked to be declared null and void. But this does not mean that the affected employees will be terminated as well. On the other hand, the employees under the Contracts should be regularized by respondent NPI to retroact to the time that they became regular employees by operation of law."

NOTE:

Under the Philippines Labor Code Article 106:

"There is labor only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him."

See previous stories on this campaign:

Nestle Philippines: legal complaint against labour-only contracting at Nescafe co-packer

Union tells Brabeck advisor: lawsuit against labour-only contracting will go all the way to the Supreme Court