Unilever PLC India V International Union of Food Workers (IUF) (SEWRI, India)

Overview

NCP Decision Accepted
Current Status Closed
Date Submitted 03/10/2006
Date Closed 09/11/2009
Case Duration 161 weeks and 6 days
Host Country India  (OECD Enhanced Engagement)
Sector Food, Agriculture and Tobacco 
Issue(s) Failure to abide by national law; illegal transfer of ownership; illegal company closure; failure to engage in collective bargaining
Provisions Cited I.7  IV.6   
Case Description On the 3rd October 2006, in a submission to the British and Dutch NCPs, the IUF reported violations of the Guidelines conducted by a Unilever subsidiary - Hindustan Lever in India, which is owned by Unilever PLC. While Unilever PLC is registered in the UK, Unilever NV is registered in the Netherlands, but they have a common Board of Directors. The case was therefore filed with both NCPs.

Hindustan Lever has for twenty years refused to enter into any collective bargaining negotiations with the legally registered union at the plant, which is a breach both of the Guidelines and national law. Salary adjustments, following the rate of inflation, have only been achieved through court orders. In March 2006, the Labour Court filed criminal proceedings against Hindustan Lever because of its disregard of court orders.

In July 2005, Hindustan Lever was sold to another company (Bon Limited) through a loan from Hindustan Lever to Bon Limited although it did not have enough capital to operate the facility. One year later, the employees were informed of the closure of the plant and the termination of their employment. IUF contended that the closure of the plant was illegal because the sale was illegal and under legal challenge in the courts.

Developments At the end of October, the Dutch NCP requested further information from the IUF in order to decide whether the case was admissible. Among other things it inquired about the value added of an NCP intervention in view of the legal proceedings. The IUF explained that their aim was primarily to find an amicable resolution of the dispute and not to get Hindustan Lever management convicted. In addition, the legal proceedings have gone on for many years and will continue to do so as the company has refused to abide by the court decisions.

Representatives of the IUF met with the UK NCP in April 2007 although the NCP had not decided whether to accept the case because of parallel proceedings. In May 2007, the NCP issued a statement acknowledging that the case merited further consideration.

Outcome The parties reached a mutually acceptable agreement outside the specific instance procedure. A comprehensive settlement was reached and approved by the HLEU membership which resolved the issues arising from the closure.

In accordance with the UK NCP's complaint procedure, the UK NCP published a reduced Final Statement (09/11/2009) which explained that the parties had reached a mediated settlement outside the UK NCP's process. This statement formally closed the complaint.

Organisations

Lead NCP UK NCP : Bi-ministerial plus Multi-stakeholder Independent Board 
Supporting NCP Netherlands NCP : Independent Expert Body 

Companies

Multinational Company Unilever NV (Home country: Netherlands)
Multinational Company Unilever PLC (Home country: UK, Netherlands)
Subsidiary Hindustan Unilever (Home country: India)

Complainants

Lead Complainant International Union of Food Workers (IUF) : Global Union Federation 

Related Documents

IUF  [Publication date: 14/10/2009] 'Settlement Ends 3-Year Dispute over Unilever India Mumbai Closure'
   http://www.iuf.org/cgi-bin/dbman/db.cgi?db=default&uid=default&ID=6246&view_rec
   ords=1&ww=1&en=1
[Date URL accessed: 18/11/2009]

UK NCP  [Publication date: 9/11/2009] 'OECD Guidelines for Multinational Enterprises Complaint from the IUF against Unilever plc on India’s Sewri factory'
   http://www.bis.gov.uk/files/file53724.pdf [Date URL accessed: 22/8/2011]

TUAC Analysis

Did the NCP publish its initial assessment? status-icon
Did the case involve parallel proceedings? status-icon
Was the existence of parallel proceedings an obstacle to the NCP accepting the case? status-icon
Was the businsess relationship other than that of a subsidiary? status-icon
Was the nature of the business relationship an obstacle to the NCP accepting the case? status-icon
Did the NCP inform other relevant government departments about its acceptance of this case? status-icon
Did the NCP offer mediation or conciliation? status-icon
Did the company accept the offer of mediation or conciliation? status-icon
Did the complainant(s) accept the offer of mediation or conciliation? status-icon
Was mediation or conciliation held? status-icon
Was mediation or conciliation conducted by a professional mediator? status-icon
Did the parties reach agreement? status-icon
If yes, did the NCP publish this agreement following the consent of the parties? status-icon
If mediation was refused or failed did the NCP make an assessment of whether the company had breached the Guidelines? status-icon
Did the NCP conduct in-host country fact finding? status-icon
Did the NCP make recommendations to the company on the future implementation of the Guidelines? status-icon
Did the NCP publish its final statement or report? status-icon
Did the NCP provide for follow-up of the agreement/recommendations? status-icon
Did the NCP inform other relevant government departments about its final statement or report? status-icon
Did the NCP inform public pension funds about its final statement or report? status-icon
Did the NCP apply any consequences in this case? status-icon
Did the NCP follow the indicative timescales set out in the procedural guidance? status-icon
Was there a positive outcome for the workers involved in this case? status-icon
Did the filing of the case under the Guidelines have a positive impact for the workers involved? status-icon
Did the lead NCP play a positive role? status-icon
If different, did the home NCP play a positive role? status-icon

TUAC Assessment

Whilst it took a long time to get the assessment from the UK, overall there was a positive outcome.

Implications

The NCP focused on "adding value" rather than addressing the issues that were the subject of parallel proceedings and was able to provide mediation.

Use of the home country High Commission in the host country