SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
GLAXO SMYTH KLINE
(REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
Chairman: Mr Haugh
Employer Member: Ms Doyle
Worker Member: Ms O'Donnell
1. Pay Increase
2. This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 21 July 2016 in accordance with Section 26(1) of the Industrial Relations Act, 1990.
A Labour Court hearing took place on the 25 October 2016.
3. 1. The Company is among the top six global pharmaceutical Companies.
2. In 2015 the CEO and other Senior Executives received exorbitant pay increases.
3. The Workers have made a significant contribution to the ongoing success of GlaxoSmithKline Dungarvan (GSK) both locally and globally.
4. 1. The existing package of pay and benefits is first class
2.The pay proposal is very much in line with current pay trends.
3. The financial challenges for GSK (Dungarvan) require tight management of the cost base.
Background to the Dispute
There are two separate manufacturing units at the Company’s Dungarvan site – the Oral Care (OC) unit and the Over the Counter (OTC) unit. Historically, each was acquired by what is now GlaxoSmithKline (GSK) from different companies. For this reason, the basis on which pay rates are calculated differs between the two units.
The Company and the Joint Union Committee (JUC) concluded a collective agreement in 2012. As part of that agreement, the Company agreed to make a financial contribution to employees who wished to purchase health insurance for their dependents. The final phase of this element of the agreement runs until 31 December 2016.
Discussions between the Company and the JUC in respect of a successor agreement commenced in July 2015. The Company’s final proposal provided for a 6% pay increase over a 3-year period as follows: 2015: 1%; 2016: 2.5%; and 2017: 2.5%. The Workers in the OC unit have accepted this proposal and it has been implemented in their case. The Union, however, in December 2015 referred a dispute to the WRC in respect of its members employed in the OTC unit.
The Parties’ Positions
The Union’s claim focuses, in particular, on the health insurance allowance for dependents element of the Company’s proposal. In this regard, the Union is seeking full health cover for immediate family dependents from 1 January 2017 ongoing (to replace the current healthcare allowance of €1,000.00). The Union is also seeking an increase in the value of the annual Christmas voucher paid to employees from €250.00 to €500.00.
The Company submits that any agreement on its part to implement a more favourable arrangement for its employees in the OTC unit over and above those accepted by the employees in the OC unit would have an adverse impact on employee relations overall at its Dungarvan site. It further submits that its existing package of pay and benefits is first class but that the Dungarvan site faces considerable financial challenges into the future that make it imperative for it to manage its operating costs tightly. The Company also makes the point that the pay proposal is fully in line with current pay trends in the sector. Finally, the Company has indicated that it is willing to discuss the issue of health insurance allowance for dependents, without commitment, at the end of the period of the current agreement/proposed agreement in December 2017.
The Court recommends that the Union should accept the Company’s pay proposal in respect of its members employed in the OTC unit. The Court has already noted the Company’s offer to discuss the issue of healthcare allowance for dependents of employees. The Court recommends that these discussions should commence as early as practicable in the last quarter of 2017 and should take full cognisance of norms in regard to healthcare cover for dependents in the sector.
The Court so recommends.
Signed on behalf of the Labour Court
9th December 2016Deputy Chairman
Enquiries concerning this Recommendation should be addressed to Clodagh O'Reilly, Court Secretary.