Subcontracting Practices at Danish Crown’s Oldenburg Slaughterhouse Stoke Union Concerns

The German public prosecutor and tax authorities are examining serious allegations concerning world’s largest pork exporter Danish Crown in Germany.
In December 2009, a large number of subcontracted Romanian workers received only partial or no pay at all for their work at the slaughterhouse.

On 20 January the German newspaper Nordwest Zeitung reported that 32 Romanian workers were promised good wages and conditions for migrating and working at Danish Crown’s slaughterhouse in Oldenburg, Germany. The reality turned out to be much different. While they had been promised € 7.50 per hour and 152 hours of work per month (for a total monthly wage of €1140) “we only got € 467.69 in a month” (€ 3 per hour) says one of the Romanian workers. “Ten others received no pay at all for the whole month of December”.

Following this episode, the Romanian workers contacted the Oldenburg tax authorities. The Department for Undeclared Work (TCS) has now launched an investigation on Danish Crown to look into the allegations concerning exploitation of undocumented workers. The main inquiry focuses on Danish Crown’s main subcontractor of Eastern European workers, Cypriot labour agency Atlanco Limited, headquartered in Dublin, Ireland.

Danish Crown facilities in Germany are almost exclusively staffed with subcontracted Eastern European workers. The company pays less than half the price of a permanent worker and a third of the wage of a worker covered by a Danish union collective agreement. According to Danish Crown’s own projections, the ratio of agency to permanent meat workers in Danish Crown’s German operations will be 820 to 118 in 2009/2010, up from the end of 2008 when it stood at 670 to 131.

The systematic use of vulnerable, underpaid agency labour from Eastern Europe in Germany is one of the reasons for the transfer of 7 million Danish pigs for slaughter to Germany, as well as for Danish Crown’s closure of slaughterhouses in Denmark and the redundancy of 3,000 Danish workers over the last few years. Danish Crown is now threatening to transfer more jobs from Danish slaughterhouses to German operations staffed with underpaid agency labour if Danish Crown workers in Denmark do not accept a 20% reduction on their wages in the currently ongoing negotiations with the Danish Food Workers’ Union NNF.

“This is not acceptable”, says Ole Wehlast, President of the Food Workers’ Union NNF and President of EFFAT’s Food-Beverage-Tobacco-Sector, the IUF’s European region. This is not the first time that Danish Crown’s slaughterhouse in Oldenburg is involved in suspicious employment practices. In 2006, Danish Crown’s former agent, Ingolf Röschmann, was sentenced to one year jail and fined €500,000 for the employment of undocumented workers.

“If the new allegations are true, then this is nothing less than a scandal for Danish Crown. Following the verdict in 2006, Danish Crown should have complied with the law and done everything possible to prevent similar cases. However, Danish Crown management seems to be determined to continue staffing its German operations with agency workers paid starvation wages, also at the expense of regular workers paid union wages in Denmark, regardless of whether this means promoting social dumping practises and making business with ruthless labour agencies” says Ole Wehlast.

The profound disparities and lower conditions that agency workers have to face and the threat that these practices represent for decent union jobs in Danish Crown  the meat industry generally were at the heart of the last IUF Danish Crown Union Conference hosted by the  NNF in Copenhagen last 29 October.