Plant closure in Chile
Lead NCPChile
Supporting NCP(s)None Selected
DescriptionSpecific instance notified by the Chilean Trade Union Confederation (CUT) regarding the activities of Unilever, a multinational enterprise operating in Chile.
Theme(s)Employment and industrial relations, Environment
Date1 Nov 2005
Host country(ies)Chile
SourceTrade Union
Industry sectorAccommodation and food service
StatusConcluded
Summary

In November 2005 the Chilean NCP received a request for review from the Chilean Trade Union Confederation (CUT) alleging that Unlever had breached the employment and industrial relations, and environment provisions of the Guidelines by the closure of its plants in Chile.

It was alleged that, in December 2004, Unilever had verbally informed the trade union representatives that it was going to close three plants, leaving 250 workers unemployed. A fourth plant was to be close unless the workers accepted a wage cut. Moreover, Unilever had prevented the union from making the company’s decision public. It also had promised a group of workers that they would not be dismissed if they opposed the actions taken by the union.

The NCP organised several meetings and acted as mediator which lead to Unilever and CUT reaching an agreement in November 2005. The parties agreed to separate the collective bargaining procedure from the restructuring procedure leading to the closure of three plants. It was also agreed that all the workers laid off would be compensated. In addition, the workers were to share an annual bonus of 14 million chilean pesos. Unilever did not re-employ the workers, but agreed to provide them with good references. The parties accepted the procedure and conclusions of the NCP in November 2005 at which time the NCP issued a public statement regarding the outcomes (in Spanish).