HUL resolves row with workers, reopens unit after 7-week lockout

HUL resolves row with workers, reopens unit after 7-week lockout

Hindustan Unilever Ltd (HUL), the country’s biggest household products maker, said it will end a seven-week lockout on Monday at one of its factories after a dispute with workers was resolved. The factory makes almost a third of the company’s personal care products.

The decision to reopen the factory was taken after a meeting with workers and the assistant labour commissioner, the Mumbai-based company said in an emailed statement on Sunday.

The factory is located in Doom Dooma, 500km from Guwahati, the commercial capital of the Northeastern state of Assam.

The factory, one of the 40 that HUL operates in the country, accounts for about 30% of the company’s total output of personal care products. Half the company’s pre-tax profit and a quarter of its net sales come from products such as Fair & Lovely skin creams and Pepsodent toothpastes.

“The union has agreed to abide by all the conditions of the settlement signed in April 2004," HUL said.

“The management has agreed to pay the settlement implementation allowance to the workmen."

The company, however, didn’t say how much it would pay the workers.

In April 2004, the workers and the management agreed on a settlement whereby the workers were to be paid an additional allowance of Rs200 a month from April this year, HUL had said in July.

Shares of HUL, 51.4% owned by Rotterdam- and London-based Unilever, have gained 3% since the lockout started on 15 July, compared with a 0.3% rise in the benchmark sensitive index of the Bombay Stock Exchange (BSE).

On Monday, shares of the company gained 0.29% to close at Rs209.20 a piece on BSE.

The Doom Dooma factory started production in 2001 and employs more than 700 people. The factory makes shampoos, oral care products and talcum powder, the company said in an emailed response to questions last week.