Novartis V Austrian Union of Salaried Private Sector Employees

Overview

NCP Decision Accepted
Current Status Closed
Date Submitted 05/02/2008
Date Closed 01/07/2009
Case Duration 73 weeks and 1 days
Host Country Austria  (OECD member)
Sector Chemicals and Pharmaceuticals 
Issue(s) Lack of pior information and consultation on closure
Provisions Cited IV.3  IV.6   
Case Description In February 2008, the Austrian Union of Salaried Private Sector Employees (GPA) submitted a case to the Austrian NCP in February 2008 concerning the operations of Novartis. The headquarter of Novatis in Switzerland made the decision to close down the Austrian research center "Novartis Institutes for BioMedical Research GmbH & Co.KG", which employed 240 people as researchers. Information concerning the future evaluation of the research centres of Novartis was announced on the 18 December 2007. Six days later the headquarters made the video announcement, that the Austrian Novartis Institute was to be closed. The company informed its employees of the closure of its research centre in Vienna without any prior consultation.
Developments The NCP carried out consultations with the two parties and found that the Austrian management had similarly not been informed at an early stage. Hence, the responsibility for the breach of the Guidelines lay with the CEO of the headquarters in Switzerland.
Outcome The final statement was assessed by trade unions to be much weaker than an earlier draft statement. It explained that although the company had failed to give the Works Council sufficient information and notice, as required under Chapter IV of the Guidelines, Novartis had set up a social plan for employees that had been laid off, which was assessed to represent a willingness to mitigate harmful effects.

The NCP did not accept the trade union argument that this social plan had only come about as a result of trade unions using a parallel complaints procedure in the same Ministry for solving conflicts in Industrial Relation matters, which had forced Novartis to negotiate a social plan.

Organisations

Lead NCP Austria NCP : Single Government Department 

Companies

Multinational Company Novartis (Home country: Switzerland)

Complainants

Lead Complainant Union of Private Sector Employees (GPA) : National Union 

TUAC Analysis

Did the NCP publish its initial assessment? status-icon
Did the case involve parallel proceedings? status-icon
Was the existence of parallel proceedings an obstacle to the NCP accepting the case? status-icon
Was the businsess relationship other than that of a subsidiary? status-icon
Was the nature of the business relationship an obstacle to the NCP accepting the case? status-icon
Did the NCP inform other relevant government departments about its acceptance of this case? status-icon
Did the NCP offer mediation or conciliation? status-icon
Did the company accept the offer of mediation or conciliation? status-icon
Did the complainant(s) accept the offer of mediation or conciliation? status-icon
Was mediation or conciliation held? status-icon
Was mediation or conciliation conducted by a professional mediator? status-icon
Did the parties reach agreement? status-icon
If yes, did the NCP publish this agreement following the consent of the parties? status-icon
If mediation was refused or failed did the NCP make an assessment of whether the company had breached the Guidelines? status-icon
Did the NCP conduct in-host country fact finding? status-icon
Did the NCP make recommendations to the company on the future implementation of the Guidelines? status-icon
Did the NCP publish its final statement or report? status-icon
Did the NCP provide for follow-up of the agreement/recommendations? status-icon
Did the NCP inform other relevant government departments about its final statement or report? status-icon
Did the NCP inform public pension funds about its final statement or report? status-icon
Did the NCP apply any consequences in this case? status-icon
Did the NCP follow the indicative timescales set out in the procedural guidance? status-icon
Was there a positive outcome for the workers involved in this case? status-icon
Did the filing of the case under the Guidelines have a positive impact for the workers involved? status-icon
Did the lead NCP play a positive role? status-icon
If different, did the home NCP play a positive role? status-icon

TUAC Assessment

In its 2010 Annual Report, the Austrian NCP reported that "[F]ollowing extensive consultations, both parties expressed their support for the final statement issued by the NCP". TUAC undestands that in fact the trade unions concerned were dissapointed by the outcome, which they considered to be very business-friendly.

Implications

Questions over the independence of the process