Published: 26/10/2009

A negotiated settlement between Unilever and the IUF has resolved the long, difficult conflict over the rights of precarious workers at the company’s directlly-owned Lipton/Brooke Bond tea factory in Khanewal, Pakistan.

The negotiations took place under the auspices of the UK’s National Contact Point responsible for the application of the OECD Guidelines for Multinational Enterprises. The IUF made a submission to the OECD in March this year as part of a campaign which generated strong international support for the Khanewal workers and their struggle.

The Khanewal factory with only 22 directly-employed Unilever workers and many hundreds of disposable jobs for casual workers supplied by labour contractors on a “No work, no pay” system became a powerful symbol of the denial of fundamental trade union rights through massive casualization. Precarious workers at Khanewal were legally excluded from joining a union of Unilever workers and participating in a collective bargaining relationship with Unilever as their real employer.

Under the terms of the settlement, Unilever has agreed to create 200 additional direct, permanent jobs, retroactive to October 15, 2009, with job selection to be based on seniority and priority given to the members of the Khanewal workers’ Action Committee, which led the struggle locally with the support of the IUF-affiliated National Federation of Food, Beverage and Tobacco Workers. The selection and employment process will be jointly monitored and implemented by the IUF and Unilever at national level.

Because the labour hire agencies in many cases systematically failed to fulfil their mandatory financial obligations to the workers they employed as well as their statutory obligations to the state social security and retirement funds, the settlement involves both direct lump sum payments by Unilever to the contract agency workers (both those who do receive permanent positions and those who do not) as well as guarantees from Unilever that the arrears in contractors’ mandatory obligations to the state will be fully met.

Action Committee members, for their part, agree to withdraw all court petitions as part of the global agreement on permanent jobs and the wider compensation package. The settlement also contains language on non-discrimination against Action Committee members and full representational rights for the IUF and its affiliates.

As part of the agreement, Unilever commits to investment and continued operations at the Khanewal factory.

The Khanewal workers’ Action Committee has warmly thanked the many trade unionists and human rights defenders around the world who supported their struggle with demonstrations, messages to the company, meetings, pickets, political action and other ways of expressing solidarity. Their support was crucial.

Action Committee Chairman Siddiq Aassi said “I have been working at Unilever Khanewal for more than 20 years, but never imagined I would one day enter the factory as a permanent worker.” “It was a dream for us to get permanent jobs at the Unilever Khanewal tea factory”, says Mukhtar Ahmed, Action Commmittee Secretary”, “I don’t have the words to express my feelings.” According to Shahzad Saleem, Action Committee Joint Secretary, “Nobody in the factory and even in Khanewal can believe it – [when we started the struggle] people told us we would just hit a rock and be crushed.”

IUF General Secretary Ron Oswald commented that, “The Khanewal agreement, added to the recent settlement at Rahim Yar Khan, is a great moment for hundreds of our members in Pakistan who will now take up permanent employment with Unilever. It brings better livelihoods for their families and some dignity and security at work. The IUF has been proud to work with these courageous members who fought for so long for these rights in the most difficult of circumstances. We look forward to an ongoing and structured dialogue with Unilever to address future challenges within this global employer. The IUF is committed to finding ways to begin resolving those challenges ‘across the table’ – a global table, rather than through a public fight or the use of what proved to be the critically valuable OECD Guidelines for Multinational Enterprises process in the UK.”