Disguised employment at Lipton tea producer in Pakistan under investigation for labour rights violations

Disguised employment at Lipton tea producer in Pakistan under investigation for labour rights violations

Production is booming and workers are working overtime at the “Lipton tea factory” in Pakistan. This is happening in the weeks leading up to the sale of Unilever’s tea business under the new global tea company ekaterra. But it is not the unionized Lipton tea factory in Khanewal owned by Unilever – and now ekaterra – that is ramping up production. It is a dubious third-party manufacturer called AGA PACK Private Limited in Karachi.

the unbranded main gate of AGA PACK producing the Lipton global brand

Known in the Federal B Industrial Area as “the Lipton factory”, the AGA PACK factory has no sign boards or any indication of its registered name. This in itself is a legal violation that has not been reported by either Unilever or ekaterra in their due diligence. As a disguised factory, AGA PACK uses Unilever machinery and equipment and only provides minimum wage labour to manufacture one of Unilever’s global brands of purpose.

Unilever Pakistan moved machinery and equipment from its Lipton factory in Khanewal to AGA PACK in 2013 and again in 2018. This undermined jobs and job security at the Khanewal factory while increasing production under precarious employment arrangements.

Even as production increases in advance of the sale of the global ekaterra tea business on 1 October, management at AGA PACK refuses to pay the new legal minimum wage announced by the government in June 2021. Workers remain on PKR 17,500 (USD 106.30) per month, which is the legal minimum wage set in 2019.

protesting uncertainty at Lipton Khanewal

As the 199 workers at the Unilever/ekaterra Lipton factory in Khanewal protest against an uncertain future, the 288 workers packing Lipton tea at AGA PACK are in perpetual uncertainty. Only 52 of the 288 workers are legally registered for mandatory social security and health insurance. This suggests that 82% of workers do not actually work for AGA PACK. They are most likely casuals hired through third-party labour contractors.

 

It is still unclear who these contractors are and whether they are paying mandatory social security and health benefits. It is also unclear whether mandatory pensions are being paid and this is also under investigation by the Labour Department.

Workers at AGA PACK do not know because they do not have written employment contracts. This not only contravenes Pakistan labour law, but is one of the internationally recognized indicators in assessing the risk of forced labour. The absence of written employment contracts could be just another layer of deception, underpinning what seems to be a disguised employment relationship with Unilever Pakistan, and now ekaterra.

 

As Unilever launches its new global tea business, Lipton tea workers in Pakistan are protesting against deception and insecurity

As Unilever launches its new global tea business, Lipton tea workers in Pakistan are protesting against deception and insecurity

As Unilever prepares to launch the new global tea company ekaterra on 1st October, workers in Pakistan are protesting against local management’s deliberate deception and misinformation that has undermined job security and created even greater anxiety in a pandemic.

When Unilever Pakistan started the transfer of the Khanewal tea factory to ekaterra on 1st July, the Workers Union Unilever Pakistan (WUUP) requested more information about the terms and conditions of the transition and how union members will transfer to the new business. Management refused to respond, claiming that the union does not have collective bargaining status. This is despite the fact that WUUP represents the majority of workers at the tea factory. WUUP – a member of the IUF-affiliated Pakistan Food Workers Federation (PFWF) – argued that it does not need collective bargaining status to have the right to information about its members’ job security. Management instead misused an emergency safety meeting to make announcements to all employees, giving vague reassurances. When a formal “town hall” meeting of all employees was finally held, no new information was provided and questions by worried union members were ignored.

While the company claims it is only obliged to meet with representatives of the Unilever Employees Federation due to its national collective bargaining status, management conveniently ignores the fact there is no collective bargaining involved. It also ignores well documented corruption and collusion that severely undermined human rights and violated ethical standards in the past. In 2013 the leadership of the Unilever Employees Federation were charged with embezzlement of the workers’ welfare fund, which also implicated people in local management.

Even with the workers welfare fund accounts frozen while under police investigation, Unilever Pakistan management continued to make monthly deductions from workers’ wages. WUUP representatives at Khanewal asked management what will happen to these funds when ekaterra is spun off from Unilever on 1st October. There was no reply. Given past corruption and collusion, Lipton tea workers are worried their entitlements will simply disappear when they move to the new company.

Also unresolved is the fate of 33 WUUP members arbitrarily designated as “surplus” at the Lipton factory. Management refuses to discuss their fate with the union, raising fears they will be forced into redundancy on 1st October.

In recent years management transferred more machinery and work to third parties, reducing job roles at the Lipton factory. Despite company claims that AGA PACK Private Limited in Karachi is a specialized tea business, all of the machinery and equipment is owned by Unilever Pakistan. AGA PACK’s sole specialization is that it provides cheap, non-union labour.

The fact that AGA PACK was given much more information by Unilever Pakistan management about the new business arrangements after 1st October, suggests that ekaterra will maintain these precarious employment arrangements and disguised employment relationships. Instead of a fresh start to overcome the legacy of corruption, collusion and rights violations in the past, ekaterra appears more determined to limit the role of independent unions in the future. Yet the deception and misinformation used to launch its new business risks creating mistrust and uncertainty well beyond the Lipton workers at Khanewal.

 

Essential food workers at General Mills strike for decent pay, secure jobs

Essential food workers at General Mills strike for decent pay, secure jobs

After working hard throughout the pandemic as essential food industry workers, members of the IUF-affiliated United Workers Union (UWU) are on strike for decent wages and fair treatment.

For workers at the General Mills factory in Rooty Hill in New South Wales, Australia, there is no recognition or reward for their hard work or long hours as essential food industry workers making brands like Old El Paso Mexican Food and Latina Fresh Pasta. This includes casual workers working for more than five years in insecure jobs. Despite being essential in the pandemic, General Mills is refusing to make them permanent.

Yet in its announcement to investors in March this year, it was very clear that all this hard work created value for shareholders:
“In Europe and Australia, third quarter organic net sales grew 7%, primarily driven by growth in Old El Paso Mexican Food and Haagen-Dazs retail ice cream.”
All this contributed to the 8% increase in global sales to USD 4.5 billion last year, with a 27 % increase in operating profit at USD 827 million. Global management told investors that “Mexican food” in the Australian market offers “the greatest potential for growth”.

Despite contributing to this sales growth and profit through their hard work, workers in Australia are being denied a fair wage.

IUF affiliates are mobilizing to support the strike at General Mills in Rooty Hill.

Click here to sign the petition!