Caixin
Nov 23, 2016 07:21 PM
BUSINESS & TECH

Workers Back on Job at Former Danone Facility as Negotiations Continue

(Beijing) — Workers at a bottled-water plant formerly owned by Danone SA have returned to work after two weeks of protest against the sale of the subsidiary on the condition that the new corporate owner will continue negotiations on their contracts.

Employees at the Guangzhou plant of Robust Co. Ltd. suspended work or slowed production in early November after learning that their factory was being sold to a local buyer.

Robust was among the six plants, along with the Danone brand name, sold to Win Holding earlier this year. Concerned that the new owner would cut their salaries, workers demanded Danone offer a one-time severance payment and a promise by Win not to lay off staff, increase work hours or cut salaries, according to an open letter posted on the Chinese microblog site Sina Weibo on Nov. 14.

After several rounds of talks with Danone executives, workers went back to work Monday, Hou Renmeng said. Management has agreed to further negotiations on the demands in the open letter, he said.

Athena Wang, head of Danone China's media relations department, confirmed that the factory had resumed normal production.

Workers complained that Danone failed to notify them before the company changed hands.

"We were concerned Win would cut our employee benefits," Hou said. "Although we worked extra hours at times in the past, the benefit package offered by Danone was not bad."

Another major cause of contention is a one-time severance payment that workers claim they are entitled to because the company has changed hands.

However, Danone said in a statement to Caixin on Wednesday that "the deal only involves a change in share ownership, but as far as Robust employees are concerned, there is no change to the company or their labor contracts." The deal will not undermine their rights or interests, the company said.

Wang called the request for compensation "unreasonable" and "going beyond the country's labor laws."

He Hui, a lawyer at Guangdong Code Law Firm who is not involved in the case, told Caixin that the transfer of ownership will not influence contract terms. "The employees signed contracts with Robust, not Danone," said He. "The sale of Robust will not influence employees' contracts."

Wang also denied another accusation in the workers' open letter that in the past few years, Robust had violated labor rules by withholding social insurance payments and housing-fund contributions for some employees. The protestors did not offer details on how many workers were affected.

"That's impossible," Wang said. "Every company owned by Danone in China complies with the country's laws."

There have been similar labor disputes in recent years when foreign companies tried to sell their China operations to a local counterpart. In 2014, about 1,000 workers at an IBM factory in the southern tech hub of Shenzhen protested Lenovo's plans to acquire IBM's server business, fearing they would lose their jobs if the deal went through.

This article has been updated to clarify that employees at the bottling plant have returned to work and are negotiating working conditions with management.

Contact reporter Chen Na (nachen@caixin.com); editor Ken Howe (kennethhowe@caixin.com)

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