The labor union of Boehringer Ingelheim Korea said the company’s recent announcement of an early retirement program for cardiovascular diseases department violated collective bargaining rules, threatening to take legal actions against the management.
The Korean unit of the German pharmaceutical firm announced the plan for the early retirement program on 49 employees at the cardiovascular diseases division at a town hall meeting on Dec. 12.
The company’s decision to disintegrate the cardiovascular unit came amid the underperformance of flagship drugs. Hypertension treatment Twynsta (ingredient: telmisartan+amlodipine) faced tough competition against generic drugs. The novel oral anticoagulant (NOAC) Pradaxa (ingredient: dabigatran) also failed to meet the company’s expectation, as incrementally modified drugs with a change in the base were expected to come out on the market.
Yuhan Corp. will continue to promote Twynsta jointly. However, the co-promoter of Pradaxa will be changed from Yuhan to Boyrung Pharmaceutical as Boehringer Ingelheim revoked the sales rights of Pradaxa from Yuhan a year ago.
To reduce the number of the cardiovascular team, Boehringer Ingelheim Korea said it would receive requests from 23 applicants in the team to change their roles, and conduct the early retirement program for the other 26 employees in the team.
However, the labor union argued that the company had to receive role-changing requests from all of the employees at the cardiovascular team.
“Initially, the company said it would receive requests from 10 employees. But in an email on Dec. 18, the company changed the number to 23. In reality, the company would find it impossible to retain more than 16 posts, due to differences in their ranks,” said Kim Jun-tae, head of the labor union of Boehringer Ingelheim Korea. “The company is taking actions to avoid legal issues.”
Kim threatened to take legal actions against the company’s management, saying that the company noticed the labor union of the early retirement program just two days before the announcement, in violation of collective bargaining rules.
Regarding layoffs, the collective agreement states that “If the company intends to cut the number of workers due to unavoidable circumstances such as the shrinkage of the company or a natural disaster, the company should notify the labor union of the reason for layoffs at least 50 days before the collective bargaining.”
“The company breached the rules of collective bargaining regarding the 50-day prior notice. So we demanded the company withdraw its plan for early retirement program,” Kim said. “If the company takes no measure, we will take legal actions.”
Kim argued that the company should explain what kind of “management issues” the company had and hold accountable executives who shuffled workers without a long-term goal.
“CEO Park Ki-hwan set up the cardiovascular team by revoking Yuhan’s sales license of Pradaxa. But within a year, he is laying off workers at the team,” Kim said. “The company says the team will be withdrawn due to management issues, but not a single executive takes responsibility for mismanagement. No CEO, no sales team head, no executive director is being held accountable.”
Some workers consider the early retirement program on the cardiovascular team as the first step of withdrawal of Boehringer Ingelheim from the Korean market, according to Kim.
“We want the cancellation of the early retirement program or all of the cardiovascular team workers’ change of roles,” he said.
However, experts said it would be difficult for the labor union to claim that the company violated the collective agreement regarding the 50-day prior notice.
“Unless there was a separate agreement at the business site, the 50-day prior notice does not apply to voluntary retirement,” a labor attorney said. “At the current stage, the company does not seem to have conducted any illegal wrongdoing. The labor union will find it impossible to take legal actions.”
However, if the company fails to cut the number of workers and layoffs workers under the early retirement program, it will have to notify the labor union 50 days earlier, he added. “The best way for the labor union is to earn advantageous conditions for early retirement through negotiations and fight against layoffs,” the attorney advised.
An official at Boehringer Ingelheim Korea said the company was taking internal hiring procedures to help those affected by the early retirement program to find other roles first.
“For workers who want a change of roles, we will discuss the matter with the labor union,” the official said.