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Nestle Korea Labour Union wins settlement, strike action averted

Posted to the IUF website 21-Mar-2006

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After months of deadlocked negotiations caused by management's refusal to bargain in good faith, the Nestlé Korea Labour Union has finally won an agreement and settled the contentious issues of working time and leave entitlement.

On the evening of 13 January 2006, the NKLU president and the management representative came to an agreement over implementation of the 5-day workweek. The next day the settlement was ratified by a union membership ballot, with 88.8% voting in favour of ratification.

The new settlement also raises the wage increase from 2004-2005 (over and above the 2003 agreed levels) with retroactive pay, but freezes the wages from June 2005-June 2006. So compared to a 3% increase in 2003, wages for June 2004-June 2005 were increased retroactively 5.5% (amounting to 7.5% with the automatic wage-based Hobong [seniority-based] increases).

NKLU members vote for strike action in response to management refusal to bargain

On 9 November, the Nestle Korea Labor Union (NKLU) held a successful strike ballot, with 72% of the entire membership voting in favor of strike and a participation rate of 97%.

Even after the strike vote management aggravated the situation by again changing its position on holiday leave and working hours by proposing even worse conditions, making it impossible to continue negotiations.

As the strike deadline neared, union members refused to work overtime and on weekends, increasing the pressure on management to start negotiating in good faith and reach a settlement.

Below is the communication sent in late November to all affiliates with members in Nestle alerting to the possibility of a strike in Korea:

Since May 2004, the management at Nestle Korea has demonstrated its unwillingness to bargain in good faith with the Nestle Korea Labour Union (NKLU), an IUF affiliate, and has engaged in a series of illegal and unfair labour practices intended to punish the union for its successful strike action in 2003. The 2003 dispute was fairly and legally settled, new Collective Bargaining Agreement provisions were ratified with articles securing the union's initial demands, and union members returned to work in good faith with the intention of resuming their duties. Despite this, the management has attempted to undermine morale and inflict punishment on the union by refusing to bargain in good faith, leading union members to feel betrayed by the company.

Of particular concern is management's position that the holidays and working hours provided for in the Collective Bargaining Agreement will not be applied to any employees hired after the signing of the Agreement. This would in fact institutionalise discrimination in wages and benefits and would deny new employees certain CBA benefits and entitlements - a position which is clearly unacceptable to the union.

On 28 October 2005, the Regional Labour Relations Commission concluded that attempts at mediation had failed and no further mediation was possible. This then paved the way for possible strike action. A strike ballot was held by NKLU on 9 November, with an overwhelming majority of members (72%) voting in support of strike action.

In the 52nd round of CBA negotiations on 17 November 2005, NKLU again bargained in good faith but management changed their previous position and presented a new proposal to reduce monthly leave. This effectively prevented an agreement being reached.

Faced with this worsening situation and the continued refusal of the management of to respect the union by bargaining in good faith, we are calling on all IUF affiliates with members in Nestle to prepare for the possibility of strike action by the NKLU. Should a strike occur we will call on affiliates to send messages of solidarity support and to raise the issue with their respective managements. In addition, for affiliates with members employed in plants producing instant coffee, we will call on them to ensure that there is no additional production geared towards meeting the shortfall resulting from a strike at the Korean plant. There will be further communication on this should a strike occur.


Despite reaching a settlement and averting strike action, the union has made it clear that it is prepared to resist management’s refusal to negotiate in good faith and attempts to interfere in union activities in the next round of bargaining. These unfair labour practices will not be tolerated, and strike action will always remain an option so long as management refuses to respect the union.