Workers in Guangzhou Strike for Severance Payment after Danone Sold Robust Water Factories

Source: Weixin ( (2016.11.09)
Editor: Red Balloon

Groupe Danone, well-known by Hong Kongers for its milk powder and bottled water brands, has sold all of the 6 Robust Water Factories in China, along with the factory workers, to Shenzhen Win Holdings. In violation of the labour law, Danone refused to offer severance payment according to the workers’ years of employment on the pretext of the unchanged entity name – which is not the first time the food-products corporation cuts down compensations under false pretences. The enraged workers in Guangzhou hence began a go-slow strike on Tuesday (8 Nov) to air grievances against the proposed incentive pay plans, urging the management to respond to their demands. Factory operation would not resume unless consensus is reached in the labour-management negotiation, the workers claimed.

‘(Danone) used the people and water resources in Baishan, now they just want to slip away,’ said one woman worker from Robust Water Factory in Baishan Village, located at the foot of Maofeng Mountain, Baiyun District, Guangzhou. The factory, for which she had worked for a decade, was sold along with the other 5 Robust Water Factories by Danone to Win Holdings. The fact that Robust Water Factory retains the same name after the transfer of ownership provided the management with an excuse not to hand out severance payment to the workers. On 8 November, Robust Water Factory workers participated in a slowdown, reducing work efficiency to protest against the incentive pay plans suggested by the management. Factory production is now suspended.

(Banner hung in Robust Water Factory by employees.
Source: Weibo)

As a brand under one of the world’s top 500 companies, Robust Water Factory refused employees their severance payment. Including the one in Guangzhou, the other 5 Robust Water Factories located in Zhongshan, Beijing, Chengdu, Chongqing and Tianjin are all claimed to have been purchased by Win Holdings in Shenzhen. In the management’s announcement, only a two-time incentive payment was mentioned for the workers who continued employment. Severance payment was, however, rejected. Robust (Guangdong) Food & Beverage Co. Ltd. is an enterprise under the French Danone Group, which is listed as one of the top 500 corporations of the world. According to the Group’s financial report for the second quarter and first half-year in 2016, Danone turnover was on a steady rise, with a 3.8% increase compared with the performance in the previous year. In China, Danone owns two drinking water brands, including Robust and  Health. Since 2001, the French conglomeration acquired full ownership of Robust, with a total of 6 plants producing bottled water across the country. The average annual profit in the past 10 years counted up to 10 Million RMB – considering solely the Guangzhou factory’s performance.

(Banner hung in Robust Water Factory by employees.
Source: Weibo)

Despite the enterprise’s drastic shift, employees were not informed at all. No labor-management meeting had been called to notify workers about the selling of all water factories and employees, before Danone and Win Holdings struck the bargain in September 2016. The official explanation offered by Danone suggested that the trade was merely a change in holdings, which does not affect the entity status of Robust. Having served Robust for 15 years, a worker told us, ‘Danone used to emphasise the ‘human-centred’ culture of the company, but now they sold us like commodities to another enterprise without our knowledge. The values I previously built up in Danone all crash down today. We are betrayed by Danone.’
Half of the workers have worked for more than a decade in Robust. Among all the 6 Robust factories, the Guangzhou factory has the most workers, with 69 female workers accounting for 80% of the total number of workers. More than 30 employees have worked for over 10 years, the average working years is 8 years. Frontline workers are generally older, around 47 to 48. ‘These senior workers will retire after 3 years, and they have served Danone for beyond 10 years. Now Robust and the workers are sold to Win Holdings, if Win Holdings denies their working years and sacks them, they will not get a penny (of severance payment) at all,’ said one department manager who is in frequent contact with frontline workers, ‘we have diligently worked for Danone for a dozen years, and end up being sold without our knowledge. We feel distressed and betrayed, a (Danone’s arrangement) was to us emotionally unacceptable.’
In 2015, Danone set a precedent of selling its company, Dumex, to Yashili. The few dozens of workers continued employment in Dumex, yet all but less than 10 resigned within a year. Therefore, Robust Water Factory (Guangzhou) workers had voiced their concerns several times to Danone, requesting the group not to sell employees to other companies without workers’ consent, and to bear the responsibility for settling workers with agreeable terms. Their demands were, however, ignored. On a meeting organised by the workers’ union of Robust, an employee in the Finance Department of the Headquarters named Zita aired her views and requests. Her name was unfortunately not erased from the papers by the union, and she was later sacked by Danone absenteeism. Zita’s case stirred up Robust workers’ fierce opposition against Danone’s illegal dismissal of employees.
Robust workers now request a bargain with the management and threaten not to resume work without any consensus reached. On 9 November, Robust Water Factory in Guangzhou faced a stoppage, production was suspended. Workers’ demands were posted on Weibo, yet were deleted in less than a few hours. The demands go as follows:
  • Offer severance payment, compensation calculated as 2n + 1 (n=working years)
  • The standard compensation amount should follow the average monthly wage, and be returned in a one-off payment
  • Unpaid sum for social insurance and housing funds should be paid back
  • Employees with work injuries and occupational diseases should be compensated.
‘In spite of being one of the top 500 companies, Danone does not put workers’ rights in their consideration. Only when we unite, could we defend our own rights.’ stressed the workers of Robust Water Factory in Guangzhou. Before both the labour and the management come into terms, employees will not resume factory operations. Danone cannot exert pressure on employees on any grounds, or to punish or sack any workers.