Nestlé V Korean Confederation of Trade Unions (KCTU) International Union of Food Workers and the International Federation of Chemical, Energy, Mine and General Workers’ Union (ICEM)

Overview

NCP Decision Accepted
Current Status Closed
Date Submitted 26/09/2003
Date Closed 01/04/2004
Case Duration 26 weeks and 6 days
Host Country South Korea  (OECD member)
Sector Food, Agriculture and Tobacco 
Issue(s) Sub-contracting workers; failure to engage in construction negotiations; threat to re-locate/transfer in the context of a collective bargaining dispute
Provisions Cited IV.1-a  IV.7   
Case Description The Korean Confederation of Trade Unions (KCTU) in co-operation with the International Union of Food and Allied Workers (IUF) and the International Federation of Chemical, Energy, Mine and General Workers’ Union (ICEM) filed a case with the Korean NCP at the end of September 2003. The Swiss NCP was also informed of the case as Nestlé is headquartered in Switzerland. Nestlé had threatened to close its factory in Korea because of a collective bargaining dispute with the Nestlé Korea Labour Union. The union took strike action after the local management had refused to include issues over staffing levels and subcontracting in the negotiations for a new collective bargaining agreement. In response, the management initiated a lockout and threatened to close its operations in Korea. In a letter to the employees and in Korean and international business press, Nestlé announced that they were considering moving their production to China amongst other countries. This was an infringement of Paragraph 7 of the Chapter on Employment and Industrial Relations .
Developments Nestlé in Korea came under heavy pressure to change its behaviour, not least from the parent company. In addition, on November 16 the Chungbook Province Labour Relations Committee ruled in favour of the union. At the end of November, a settlement was reached between the Nestlé Korea Labour Union (NKLU) and the company. The new collective agreement established a joint union-management committee to review any proposed changes to employment levels, working conditions and job classification. It also provided for a 5.5 per cent increase in salaries.
Outcome In response to repeated requests by the unions, the Korean NCP stated in March 2004 that the case was closed given the agreement between the NKLU and Nestlé. The unions were extremely critical of the NCP since it closed the case without having met the unions and without making a public statement. The unions therefore asked the Ministry for a meeting to discuss this further. As a result, a meeting was held between the NCP and the KCTU, in which the NCP reconfirmed that the case was closed. It did however state its willingness to start a dialogue over its internal procedures.

Organisations

Lead NCP South Korea NCP : Independent Expert Body 
Supporting NCP Switzerland NCP : Single Government Department 

Companies

Multinational Company Nestlé (Home country: Switzerland)

Complainants

Lead Complainant KCTU- Korea : National Centre 
Supporting Complainant ICEM International Federation of Chemical, Energy, Mine and General Workers' Unions : Global Union Federation 
Supporting Complainant International Union of Food Workers (IUF) : Global Union Federation 

Related Documents

Peter Rossman  [Publication date: 13/7/2010] 'Whose Workplace? The ILO and Nestlé'
   http://cms.iuf.org/?q=print/443 [Date URL accessed: 22/7/2010]

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

The Swiss NCP played a constructive role in trying to resolve the case. Although the Korean NCP had the main responsibility for dealing with the case, the Swiss NCP met with the unions involved and Nestlé several times. It also met with a labour delegation from Korea on 21 November. The press release is available on the NCP website . Furthermore, it engaged with the Korean NCP suggesting that it should call a meeting with all parties to attempt to reach agreement on the issues raised and examined the possibilities of a joint statement.

Implications

NCP Cooperation; Home country NCP played a signficant role