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PART II: Manufacturing Insecurity at Nestle - Food and Allied ...

PART II: Manufacturing Insecurity at Nestle - Food and Allied ...

The assault on union

The assault on union membership In Indonesia there are so many precarious employment practices used by Nestlé that the combined number of workers employed under these arrangements is more than the total number of regular workers. If we look at the table below we can see a “snapshot” of June 2005, showing the number of regular workers, the number of union members and the average number of precarious workers in 3 factories and one warehouse in Indonesia. Factory/ Regular Union Daily Contract Outsourced TOTAL Workplace membership Workers Workers (agencies) Kejayan 521 354 0 0 500 1021 Gempol 117 84 0 0 312429 (warehouse) Cikupa 198 153 100 0 52350 Panjang 170 117 70 90 170 500 TOTAL 1006 708 170 90 1034 2300 The number of permanent workers is only 44% of the total number of workers employed directly and indirectly in the production and warehousing of Nestlé products in Indonesia. But since there are a large number of permanent workers who are not eligible for union membership because they are given the title of “supervisor” (even though they often do the same jobs as union members), the total union membership is only 30% of the total Nestlé workforce! That’s excluding all the sales force workers! In all these cases, outsourcing and the hiring of casual workers, fixed-term contract workers and labour hiring agency workers has resulted in a dramatic decline in union membership. Declining membership translates into declining bargaining power. For this reason it is urgent that unions address the issue before the balance of forces shifts even further in favour of the company. OUTSOURCING AND CASUALIZATION IN THE FOOD AND BEVERAGE INDUSTRY 23

24 PART II Manufacturing Insecurity at Nestlé In some cases the assault on the union involves closure and relocation to a nearby country where the regular jobs of union members are replaced with precarious employment. For example in early 2005, Nestlé Nordic announced the closure of its ice cream plant in Sweden and transfer of production to Denmark. In Sweden, 60% of the sales force is directly employed by Nestlé while 40% is “franchised”. In comparison, in Denmark, the sales force is 100% “franchised” (outsourced). During bargaining over the planned relocation Nestlé management admitted it would be looking at its sales force cost structure for further savings - most likely by increasing the rate of “franchising” in Sweden, where the commercial workers union had just re-negotiated the collective agreement for the directly-employed ice cream truck drivers. Asked whether “franchising” actually meant transforming Nestlé employees into independent contractors – the answer was yes! ...in most cases management wants to speed up this process of bringing in precarious workers to cut costs, abolish benefits and weaken union strength When early retirement paves the way for new kinds of precarious employment Another important source of creeping casualization and outsourcing involves the replacement of retirees with precarious workers. As regular workers retire, leaving the workplace and their union, the people that fill the positions are often denied the same pay and benefits, are denied coverage under the CBA and, of course, are denied union membership. Sometimes the management justifies this by claiming the position vacated by a retiree has ‘changed’ or has been ‘re-organized’. Or management may just abolish that position and create a new position – the same work, or MORE work, but for less pay and limited benefits. By replacing each outgoing regular worker as they retire, management can slowly introduce an entirely new set of work arrangements based on precarious employment. But in most cases management wants to speed up this process of bringing in precarious workers to cut costs, abolish benefits and weaken union strength. This is where voluntary early retirement plays a critical role. As early retirees walk out, precarious workers are marched in. IUF

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