Anglo-Dutch conglomerate Unilever has suspended operations at its Wall's ice cream factory in Sri Lanka after employees downed tools over a pay dispute.

The employees had staged a picket after the secretary of a branch union was fired. The company commented that employees had gone out on strike "following disciplinary action taken against two employees who disrupted the agreed production process". In a statement, Unilever said that demands from a branch union had been rejected as unreasonable and subsequent action has been seen as "holding the company to ranson".

However, Vijitha Herath, head of the Inter Company Workers Union, said that that have been no threats or intimidation.

Earlier this year, speculation was rife that Unilever may pull out of Sri Lanka altogether, as labour unrest had slowed production and earnings growth. The latest events make this possibility even more likely.


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