Ensuring decent working conditions and fair employment for all employees is our primary target and an integral part of the company values and work on developing our social responsibility. We are committed to promoting decent work and fair employment conditions in our own operations and across our value chain.
Working conditions and employment
Decent and fair employment conditions
Our Code of Conduct forms the basis for respecting and promoting decent and fair working conditions at UPM. It is complemented by a more comprehensive global Human Resources Rules that defines in more detail the principles of working conditions, labor practices and decent work as described by the International Labor Organization (ILO) what UPM is committed to and what is expected of our employees. Wherever we operate, we comply with international, national and local laws and regulations, and respect international agreements concerning human and labour rights and freedom of association.
All UPM employees have the right to have written and understandable information specifying their terms of employment. UPM complies with legislation and respective collective bargaining agreements regarding all their regulations, including regulations concerning working hours. Overtime is voluntary and compensated to employees according to legislation and collective bargaining agreements. We take work/life balance seriously and strive to ensure that our workplace practices are developed so that where possible, attention can be paid to individual needs to combine work and family.
Active dialogue with labour unions
We conduct both formal and informal consultations with unions and actively promote employee participation and consultation, organised in accordance with international and national rules and regulations. To encourage an open, international dialogue, between corporate management and UPM employee representatives, UPM has a co-operative body, the UPM European Forum, which focuses on issues related to changes within the company and the business environment in general. The forum organises regular meetings for employee representatives from business units operating in Europe. To promote employee participation, consultation and dialogue between UPM Business Area and country management, and employee representatives and employees on national level, there are co-operative bodies in UPM countries, operating based on country-specific rules, regulations and UPM practices.
In the context of labour unions, freedom of association means that employees have the freedom to form/or join labour unions and to bargain collectively. We do not collect information or report on our employees’ union membership at a global level due to differences in national legislation in our various operational countries. The percentage of employees covered by collective agreement mechanisms was 61% in 2018.
We are committed to provide our employees with fair compensation and a salary required for decent living. UPM observes minimum wages set by legislation and collective agreements. Our commitment to fair compensation is stated in our Code of Conduct and further specified on our respective policies and rules on compensation and benefits.
UPM rewards and recognises high performance. Our approach to compensation consists of a base salary, benefits and incentives, which are determined by UPM’s global rules, local legislation, general agreements, local market practice, the level of the position and individual performance. Gender, age, ethnic origin and nationality have no role in the definition of salaries and wages.
We continuously review the differences between male and female average salaries. The differences between male and female average salaries do not vary a lot and in both directions, as assessed in UPM’s main countries of operations of salaried employees. Intangible recognition is included in the total reward portfolio, which means that UPM provides, for instance, a safe and healthy working environment, interesting and meaningful work and good leadership and career opportunities.
UK Gender Pay
In accordance with the UK Equality Act 2010, we publicly disclose our gender pay gap information concerning our operations in UK. The gender pay gap is the difference in the average hourly wage of all men and women across a workforce. All public bodies with 250 or more employees are required to publish gender pay gap data on UK Government and company website showing how large the pay gap is between their male and female employees. The gender pay gap is not the same as unequal pay which is paying men and women differently for performing the same (or similar) work. Unequal pay has been unlawful in UK since 1970.
UK Gender Pay Gap 2018 UK Gender Pay Gap 2019
We want to recognize all our employees for their performance. All our employees belong to a unified annual Short-Term Incentive (STI) scheme covering group- and business-level targets as well as personal and team performance targets. The annual incentives paid in 2018 for the 2017 STI plan were EUR 62 million. For recognizing significant individual or team success, we have a separate Achievement Award system in place. This practice is designed to support UPM’s high performance culture and to recognise individuals and teams for outstanding contribution, significant achievements and exceptional performance.
In addition to the short-term incentive plan, we provide two long-term incentive plans. These include Performance Share Plan (PSP) for senior executives and a Deferred Bonus Plan (DBP) for other key employees. The annually launched plans cover approximately 400 employees.
Safety and well-being
Safety is an essential part of UPM’s activities, organizational culture, and management systems of our sites. Ensuring the right to a safe and healthy working environment is our top priority. Our clear target is to make every day a safe workday. We believe that safety is a right of everyone working at UPM premises, and our safety standards and requirements cover our own employees as well as contractors and visitors at our premises.
Focus on learning
To us, safety goes beyond insisting that people comply to set rules and regulations. Our safety work is about developing, learning, and capacity-building. That is why we engage all our employees as well as our partners working at the UPM premises in not only conforming to our safety requirements but also proactively developing best practices and improving our safety culture. For example, we encourage everyone to report on deviations but also positive safety observations and near-misses which serve as a learning point for the future.
By building a picture of our opportunities and risks, we can concentrate our safety efforts. This is information which we share openly across the company.future incidents. We analyse our performance and identify lessons learned from incidents, near misses and audit findings. We investigate safety incidents and near misses to identify any potential underlying causes and we defined corrective actions and effective control measures to prevent similar.
Improving safety in our operations is a high priority and we are working on it across our businesses. Regular management reviews, exemplary leadership and feedback develops our growth mindset. To monitor how we are doing, we set ambitious annual safety performance targets and track our safety performance using a comprehensive set of safety metrics. This set also includes a variety of proactive safety KPIs that have high focus on involvement and continuous improvement.
Embedding safety in every day
Safety is a visible part of our everyday routines and embedded in everything we do. Our people, and how they work with equipment, processes and each other, are essential to a safe work environment. Our safety work is consistent, and we continuously drive new safety improvements. They include reporting of safety observations, safety walks and discussions We promote safe ways of working through regular safety trainings and global safety standards, and we audit their implementation. These safety standards cover e.g. risk assessment, permit to work, safe contractor work, safety reporting, etc. All accidents, near-misses and other incidents are documented and evaluated in our global safety tool. We also include incidents involving contractor employees.
We introduced our six life-saving standards in 2017. The six chosen standards are the most relevant in preventing serious accidents. They are often related with serious safety hazards and we are committed to following them carefully and correctly. UPM Life Saving Standards aim to help both our own employees and contractors comply with company-wide standards which cover the activities of highest safety risk. We aim at making the standards a second nature to our employees – part of their thought process, part of their personal values and ultimately their lifestyle. We want to encourage safety at all levels.
Promoting employees’ health and well-being
We believe that employees’ wellbeing is built on safe and supportive working environment together with healthy lifestyle and work-life balance and has an impact on employee engagement and our business success. We are working closely with our employees and external occupational health organisations to support the wellbeing of our people. 81% of our employees are represented by a well-balanced, formal management-worker health-and-safety committees. The primary aim of these location-specific committees is to monitor and advise on occupational health and safety issues and programmes.
Our focus is not only on reducing health risks at the workplace, but also on preventive measures which contribute to individuals’ health and well-being. Several health promotion campaigns and prevention activities and are organized every year locally on our sites. Much like safety, also health and well-being at work are a result of continuous improvement, development, and engagement of our people.
That is why several health and wellbeing initiatives are on-going at various UPM sites. The aim is to support continuous improvement of employees’ health, quality of life and ability to perform at work. There is no high incidence or high risk of disease among UPM employees related to their occupation. UPM analyses potential hazards and manages those that impact on healthy working environments. To minimise health hazards, UPM has standardised processes, for example for risk assessment, personal protective equipment, chemical management, and occupational health workplace surveys. The majority of UPM’s employees work in areas with no or only minimal risk of HIV/AIDS, malaria or tuberculosis. Instructions and support are available for employees travelling to critical areas.