Unilever has agreed to protect the employment terms and conditions of thousands of workers across its European and UK food operations for two years following the division’s proposed merger with McCormick.

The commitment will apply after the $65bn combination is expected to complete in mid-2027, safeguarding affected employees until at least the middle of 2029, according to an internal memo seen by Reuters.

The agreement covers areas including employee treatment and pay, regardless of any changes in trading conditions at the newly formed McCormick-Unilever Foods business.

It is understood the protection is twice as long as the period typically offered during similar transactions and goes beyond existing UK and European Union rules, which can allow employment contracts and collective agreements to be renegotiated one year after a business sale or spin-off.

Unilever said it had made progress in discussions with European and national works councils, agreeing protections for employee terms and conditions alongside consultation timelines.

The FMCG giant employs around 4,800 people in its food division across Europe and the UK, representing approximately a third of its workforce in the region.

The company’s European Works Council, which represents almost 20,000 Unilever employees, previously raised concerns that the merger could result in job losses. It also warned that continued uncertainty surrounding the transaction could lead to industrial action.

Trade unions and employee representatives have been negotiating with Unilever since the McCormick deal was announced in March.

However, the two-year commitment falls short of the three-year protection previously secured for European employees affected by Unilever’s separation of its ice cream business into The Magnum Ice Cream Company.

Equivalent protections have not yet been agreed for Unilever food employees outside Europe and the UK.

The International Union of Food Workers has called for the guarantee to be extended globally, arguing that employees in other markets should receive the same level of security as their European colleagues.

The proposed merger will bring Unilever brands including Hellmann’s and Knorr together with McCormick’s portfolio, which includes French’s, Frank’s RedHot, Cholula and Old Bay.

The deal is also undergoing preliminary scrutiny in the UK, with the Competition and Markets Authority inviting retailers, suppliers and other interested parties to submit comments on the transaction by 5 August.

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