Exclusive-Unilever agrees two-year worker protection after $65 billion McCormick merger, memo shows

By Richa Naidu

LONDON, July 29 (Reuters) - Unilever has agreed to protect employment terms of workers in its European and British food business for two years after the planned 2027 completion of its $65 billion merger of the unit with U.S. spice maker McCormick, according to a memo seen by Reuters.

The previously unreported guarantee, twice as long as is typical for such deals, will lock the new McCormick-Unilever Foods business into a deal until at least mid-2029, governing the treatment and pay of its European employees regardless of changes in business conditions.

"We have obtained commitments regarding the long-term protection of existing terms and conditions for affected employees," the European Works Council wrote in a memo sent to employees last week.

The guarantee goes beyond protection normally afforded under European Union and British legislation, under which employee contracts and collective agreements can be renegotiated one year after sales or spin-off deals.

“We continue to engage constructively with our European and national works councils," a Unilever spokesperson said. "We have made good progress over the past few weeks and have agreed commitments in Europe regarding the protection of employees’ terms and conditions and consultation timelines."

Unilever, the maker of Knorr stock cubes and Hellmann's mayonnaise, employs some 4,800 people in its food business across Europe and Britain, roughly a third of its regional workforce.

London-listed Unilever's deal with McCormick, agreed in March, is expected to close mid-2027.

The company's European Works Council, which represents nearly 20,000 employees across Europe and Britain, has expressed concern that the merger could lead to job losses and warned that prolonged uncertainty could trigger industrial action.

Since the merger was announced, trade union federations and the European Works Council have been trying to clinch a deal for Unilever employees.

The security is slightly less than it was in the case of Magnum, whose workers received a commitment of three years.

Elsewhere in the world, Unilever has not agreed terms.

"We would hope that the two-year guarantee is provided globally as to not send a message that workers outside of Europe are worth less than their European counterparts," said Sarah Meyer, assistant general secretary of the IUF, a global federation of trade unions whose membership includes thousands of Unilever employees.

"We would hope that the same mistake is not repeated as with the ice cream separation where workers outside of Europe were not given the same guarantee on terms and conditions as workers within Europe," Meyer added.

(Reporting by Richa Naidu. Editing by Adam Jourdan and Elaine Hardcastle.)