Setting salaries and union membership

All production units are wholly-owned, and Nolato’s Basic Principles, Code of Conduct and policies apply in the same way all over the world. Salaries follow statutory setting of salaries, exceed the social minimum wages and are in line with the market.
 In China we have paid particular attention during the year to issues relating to minimum age, salaries, overtime and overtime pay. We believe that our control mechanisms are good, but internal and external auditors have highlighted particular complexity in these issues.
We have therefore carried out several measures over the course of the year to ensure that all relevant requirements are met. One example of how complex these issues can be is that many of the employees in China want to work as much overtime as possible, which can risk coming into conflict with legislation.
All employees within the Group have the right to be represented by unions or other employee representatives. They also have the right to collective negotiations and agreements.
At Nolato Beijing in China, there is a union in accordance with the rules which apply to large companies in China. All staff are provided with information about the union on employment, and employees can then make their own decision on membership. As at 31 December 2010, all employees at Nolato Beijing were covered by collective agreements.
At the Hungarian unit, there are neither unions nor collective agreements. This is representative of the normal situation at privately-owned companies in Hungary.