[Views of Cho Pilhyun] Restructuring or Voluntary Retirement?

“It is actually a ‘restructuring’ in the guise of voluntary retirement (The Union)”

“It is legal voluntary retirement according to the law (multinational pharmaceutical companies)”

Labor disputes between multinational pharmaceutical companies in Korea such as Novartis Korea, Pfizer Korea, and GSK Korea are amplifying. The union opposes the workforce reduction as 'restructuring', while the companies counter it by claiming the 'early retirement program (ERP)'. In the end, the National Pharmaceutical & Bio Labor Union (NPU, Chairman Ahn Deok-hwan, Novartis Korea) visited the National Assembly on September 6th to urge the revision of related laws, which shows labor and management are colliding head-to-head. The union claims that major multinational pharmaceutical companies are undergoing restructuring under the pretext of their business model changes, despite recording the highest sales ever thanks to Covid-19 vaccines and drugs. The companies argue that they need to redistribute human resources and competencies because organizational changes are inevitable in the process of implementing changes due to the operation of the ERP program. This is an area where the positions of labor and management differ greatly. Easy resolution of the labor-management conflict is not visible. This is because the NPU visited the National Assembly and got in close contact with the members of the Environment and Labor Committee (ELC) to urge the revision of related laws.

The NPU is putting pressure on multinational pharmaceutical companies by creating a public opinion of ‘de facto restructuring’ while making contact with the members of the ELC. An NPU official said, “At a meeting with the members of the ELC, we delivered the detailed cases of workforce reductions in the guise of voluntary retirement and frequent union oppression, which happen in multinational pharmaceutical companies.” Multinational pharmaceutical companies are actively responding, such as promptly providing counterarguments to NPU claims. An official from a multinational pharmaceutical company said, "The voluntary retirement process is proceeding transparently and fairly according to the law. Coercion is just the claim of the NPU, and it is not true.” Among Novartis Korea, Pfizer Korea, and GSK Korea, Novartis Korea is predicted to cut the most workforce at present. This is because global Novartis said that it would cut 8,000 of its global employees (108,000) when it officially announced the reorganization. Novartis Korea has closed applications for its early retirement program after two weeks. It is known that Novartis Korea will close down the respiratory division in October.

Pfizer Korea is implementing an ‘opaque ERP’. The specific details of ERP such as the scale and schedule are not disclosed at all. The company claims that specific details related to the reorganization cannot be disclosed as they may contain the company's management and employees' personal information. GSK Korea enters into legal battle with its union. The GSK union has filed complaints for violations of collective agreements and the request for the relief on unfair labor practices with the Seoul Western Office of the Ministry of Employment and Labor and the Seoul Regional Labor Commission, respectively. The union protests, saying, "The management is unilaterally violating the collective agreements and proceeding with the ERP." Obviously, major multinational pharmaceutical companies have achieved top-line growth while recording high sales during the COVID-19 pandemic. The position of multinational pharmaceutical companies is to redistribute human resources in response to such growth. The NPU plans to immediately put on a strong fight if it recognizes any coercive action, such as forced retirement during the process of the ERP. One may sense a 'high volatility' situation on both sides. In times like these, the disputes may be easily solved if labor and management approach each other with sincere dialogues and ‘trust politics’.

[WIKI KOREA=Cho Pil Hyun, Staff Reporter]