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It seems that PepsiCo’s attempts to win back its workers, angry at the company’s proposed merger with Taiwan-based Tingyi Holdings, have so far failed.
According to a deal offered by PepsiCo on 30 November, workers can either choose to continue working in the company under the same terms and conditions, or get the statutory severance compensation and then decide whether they will leave the company or re-join the firm under a new contract. Workers who have more confidence in the company can choose to work for another 12 months after the takeover and get a higher level of severance based on PepsiCo’s own standards.
Although China’s existing labor law doesn’t require PepsiCo to offer any sort of compensation to workers subsequent to a merger or takeover, experts say PepsiCo’s move is an attempt to soothe workers’ anger after the nationwide strikes and protests that hit the company’s bottling plants last month when the proposed merger was first announced.
However, dissatisfaction with the deal is very evident from workers’ online comments. A Lanzhou worker representative said they opposed this plan in their online statement after a workers general meeting on 1 December. Workers said that unless management responded to their demands for higher levels of compensation within a designated timeframe, they would continue their protests through “rational and legal” channels.
Subsequently, the official Lanzhou Municipal Federation of Trade Unions issued a statement in support of the PepsiCo workers’ “rational and legal” demands. Federation deputy chairman Wang Yumin was quoted as saying, “mergers between enterprises should take the vital interests of employees into consideration, and fully respect employees’ wishes and feelings, and prioritize employees’ legal rights and interests. Actions that harm employee interests can lead to instability and harm the future development of the company.”
While some workers who had been at the company only a short time did not really care about the outcome, others said they had a deep attachment to PepsiCo, and that is why they felt betrayed when they first heard the news that the 24 bottling factories they worked at were to be sold to Tingyi.
An online poll showed that 70 percent of PepsiCo China bottling workers surveyed would still consider staying in the company, on the grounds that proper arrangements are put in place. The poll was conducted by PepsiCo Honour Group on Sina Weibo, which has 1,463 members, most of whom are PepsiCo bottling factory workers.
In an email to the Chinese press on 1 December, PepsiCo China said it had received positive feedback from workers’ representatives and trade unions for the plan that offers more than the Chinese Labor Law stipulates.
But a representative of a Shenzhen law firm that is active in helping workers organise collective bargaining sessions with their employers suggested that “the plan is intended to buy off PepsiCo’s Chinese management because only management will benefit from it. Workers receive no real benefit under this plan.”
Although many scholars are pessimistic about the workers’ demands because they lack a clear legal base, some labor rights lawyers say no matter what the final outcome of this merger is, PepsiCo workers’ collective movement will surely have a profound impact on other foreign merger cases in China. Moreover, they point out that the lack of an effective collective bargaining mechanism in enterprises makes the situation for both workers and management more difficult to resolve.
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