Labour relations

We face many challenging issues because of the size, complexity and international presence of Nestlé, and the diversity of laws and local cultures. Inevitably, labour-related incidents – such as disagreements with local trade unions – may occur in some countries. We see this type of relationship as an opportunity rather than a problem, helping us make better decisions and build stronger relations with our workforce. The way we engage with trade unions is a key part of this, so we’ve made it a priority to develop more open, constructive relationships with our unions that focus on shared goals.

At a glance

  • We respect people’s rights to freedom of association and collective bargaining, and we support regular dialogue in places where it is not allowed;
  • We’ve signed up to a joint operating agreement with the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations, (IUF) which allows us to establish a regular and proactive dialogue on labour topics;
  • We’re working towards our goal of not requiring more than 60 hours’ working time per week across our operations, where maximum working time limits are higher or where no relevant local rules are in place; and
  • On average, we provide nearly 45 days’ notice before making any significant changes that will substantially affect our employees, such as business restructuring.

What we’re doing

  • We continue to support initiatives and training to strengthen relationships between local managers, employees and trade unions. Our approach is paying off, and we have been able to address a number of issues through proactive dialogue involving trade unions over the past year.

    One of the most encouraging features of the past year has been our improving relationship with the IUF.

    We’ve described challenges in our relationship with the IUF in previous reports. But now, thanks to sustained effort on both parts, our relationship has moved onto a new, more proactive footing. We are working together to tackle labour-related issues at a strategic level, maximising what we can achieve by sharing information and expertise.

    In October 2013, our CEO met with the IUF General Secretary, Ron Oswald, demonstrating our shared commitment to stronger relations at the highest level. Our third global meeting, held in May, saw both organisations sign up to Joint Operating Principles for how Nestlé and the IUF will work together in the future. We have committed to bi-annual meetings to be attended by an IUF leadership team, trade union representatives from around the world and a Nestlé leadership team, with agenda items proposed by both parties

    Building on common ground, in addition to the global, corporate initiative to reinforce our relationship with the IUF, we have undertaken a number of local initiatives. For example, in Italy, when traces of horse meat were found in beef used for the production of Buitoni tortellini and ravioli, the local trade unions (FAI-CISL, FLAI-CGIL and UILA-UIL) expressed their full trust in the quality of our products and the controls that are taking place.

    Another example – Nestlé France’s 2013 agreement with four unions regarding the employment of people with disabilities – is the first of its kind in the French food industry. The three-year agreement prioritises improved working conditions, and provides practical and innovative support for the recruitment, training and retention of people with disabilities, the provision of appropriate facilities and equipment, and awareness-raising communications. Three factories also received Paralympiades awards from the Mission Handicap group for supporting an employee with significant medical restrictions (Dieppe), raising disability awareness (Caudry) and retraining a disabled employee (Itancourt).

  • In 2013, around 51% of our employees worldwide were covered by collective bargaining agreements (2012: 51%). We operate in diverse social contexts and in some markets, the right to freedom of association and collective bargaining is at risk. We use the FTSE4Good Index to identify these markets. In 2013, there were 26 such country operations. Where local legislation doesn’t allow minority groups to negotiate collective agreements, we aim to maintain regular dialogue with individuals on issues of common interest.

    Working time

    We have been committed to limiting working time to a maximum of 60 hours a week across our operations – including where there are no local rules or where maximum limits are higher – since 2012. Across our locations, we are currently monitoring the working time of our employees according to local law, and tracking and addressing issues as they arise.

    In markets with legal limits above 60 hours, we are working hard to move towards our desired maximum.

  • Before making operational changes that could substantially affect our employees, we provide a period of notice outlining proposed changes. The minimum notice period depends on local laws and therefore varies from country to country, but on average, it is nearly 45 days. This minimum period is specified in collective agreements in 25 countries.

  • In 2013, we saw continued improvement in our relations with trade unions, with a general increase in the number, but a decrease in the impact of labour incidents around the world. Even with the commitment and dedication of local managers, we know we will face occasional challenges.

    In 2013, 25 industrial actions took place around the world (2012: 34), all of which we resolved through local dialogue and engagement.

    The percentage of working time lost due to industrial disputes, strikes and/or lockouts averaged 0.004% (2012: 0.07%).

    Legal action by a Colombian trade union

    In our 2012 report, we reported that a Colombian trade union, represented by the European Center for Constitutional and Human Rights, was taking legal action in Switzerland against Nestlé, linking us with the murder of a former employee.

    The trade union had previously accused Nestlé of complicity in the murder of union officials in Colombia, but has never produced any evidence to support its claims. It has failed to win legal actions against the company in courts in Colombia, the USA and at the International Labour Organization (ILO).

    Our position on this issue, at the time this report was published, is covered in a statement dated 2 May 2013. While we acknowledge how serious the situation is, we respect the decision of the Attorney General of the Canton of Vaud not to proceed with the legal action and we continue to reject all accusations. We also respect the decision by the Court of Appeals confirming the decision of the Attorney General thus not proceeding with the legal actions against Nestlé.

  • At Nestlé, we take a zero tolerance approach to discrimination on any grounds, including origin, nationality, religion, race, gender, age, sexual orientation or disability.

    In 2013, 92 alleged incidents of discrimination in our operations were reported (2012: 85). We have reviewed 46 of these and put remediation plans in place for 11 cases. Thirty-five cases have now been resolved through constructive dialogue, listening to all parties in the dispute, and the consistent application of our policies.

  • To strengthen skills and capabilities within our Employee Relations community – around 60 people worldwide – three regional workshops took place in 2013: in Italy, Thailand and the Dominican Republic. During the workshops, Employee Relations managers shared good practice and challenges on labour and compliance topics.

    Union settles with Nestlé Japan after 31 years

    In October 2013, the Nestlé Japan Labor Union and the Hyogo Prefectural Federation of Trade Unions (Hyogo-roren) settled a dispute with Nestlé Japan that has rumbled on since the early 1980s.

    During that time, Nestlé Japan was denounced for the discriminative treatment and unfair dismissal of union workers. In 2005, the union, along with the National Confederation of Trade Unions (Zenroren), filed a complaint against Nestlé Japan in the OECD (local National Contact Point).

    A joint statement from Zenroren and the Nestlé Japan Labor Union welcomes the fact that the agreement will set a precedent to prevent or solve labour disputes with foreign multinationals operating in Japan. Nestlé Japan and the union are very satisfied with this agreement and will continue work in a constructive way

    Improving industrial relations through leadership behaviours

    In 2009, the industrial relations climate at our Cabuyao factory in the Philippines was tense, with dismissed employees and high levels of mistrust affecting reputation and operational efficiency, as well as the costs associated with security and litigation.

    The factory’s management adopted a strategy that aimed to settle the legal cases, improve staff–management relations and reach out to the community.

    To achieve this, the factory was selected as a pilot to implement Nestlé Continuous Excellence to align the factory’s goals with the market, and to cascade these priorities to all workers. Union representatives were invited to contribute to this ‘goal alignment’ process.

    Greater cooperation between leaders and employees was also evident in:

    • Factory leaders asking trade unions for their support when introducing key initiatives;
    • Coaching on supportive behaviours being offered to all levels of employee, including managers;
    • The introduction of a recognition programme where positive behaviours and staff achievements are highlighted; and
    • A five-year Creating Shared Value programme on rural development, supported by the community around the factory and local government, to foster mutual trust with the trade unions.

    Together, these efforts have brought about a 43% reduction in security costs over five years, reinforced the credibility and reputation of the factory, and improved employee engagement.

    The factory also received ‘outstanding’ citations for ‘industrial peace and harmony’ and ‘corporate social responsibility’ from the Employers Confederation of the Philippines.

    This has recently culminated in the final official closure of the labour dispute between Nestlé and the former Cabuyao union, UFE-DFA-KMU. With this now resolved, lessons learnt and with the Nestlé Continuous Excellence foundations established, the whole factory team is in an excellent place to move forward from this significant milestone.

Next steps

  • We will continue to be guided by our principles and policies as we aim to foster our engagement with the IUF and, at a local level, to reinforce and maintain constructive dialogue with trade unions and employee representatives;
  • We will continue to resolve all labour disputes according to our principles and make better decisions using constructive dialogue and negotiation; and
  • We will maintain our efforts on continuous improvements in working conditions.

Related content

Find out more in our Creating Shared Value full report