Pfizer Korea said it would pay 12 million won ($10,114) compensation for each employee who moved to Upjohn, which the company split off and merged with Mylan under a new company name Viatris.
The company’s management and labor have been negotiating to determine the amount of compensation for the spinoff and merge of Upjohn.
Under the condition that the two sides would not file a lawsuit against each other, they had a fierce tug-of-war over whether the compensation should be proportional to salary or given as a lump sum.
Pfizer Korea said it decided to pay Upjohn employees' compensation under the condition that the workers would not seek a lawsuit against the company.
Legal precedents have not allowed employees to refuse to work at a spinoff. However, the company must have taken the safest method, not ruling out a possibility that a precedent could be overturned. This is why it decided to pay compensation to Upzone employees with the no-suit-filing agreement, experts said.
The two sides finally agreed that the management would pay 12 million won to each employee who went to Upjohn as of Aug. 31.
The payment is expected to affect MSD’s spinoff of Organon as well.
MSD is to appoint the head of Organon Korea in October and announce the list of employees who have to move to Organon.
The spinoffs of Pfizer and MSD were all decided at the global headquarters level and carried out without the full consent of Korean employees. The two companies did not recognize the Korean employees’ right to refuse to move.
Employees, originally at Pfizer and MSD, will have their affiliation at Viatris or Organon, which are completely different and unknown company names.
The labor union at MSD Korea also said they would start to negotiate with the management over the compensation amount when the company announces the list of workers moving to a new company.
Pfizer Korea’s case of paying compensation is drawing keen attention from MSD employees.
As Pfizer and MSD share a similar level of recognition in Korea, the payment method and the amount could be a baseline for MSD Korea, observers said.