Siptu hits out at Teva for axing bonus scheme

Union says pharma firm scheme worth €1,800 to each affected worker

Teva told the Labour Court that the continuation of the bonus scheme was dependent on group performance. Photograph: Bloomberg

Teva told the Labour Court that the continuation of the bonus scheme was dependent on group performance. Photograph: Bloomberg

 

Siptu has hit out at pharma firm Teva over its decision to axe a 2017 bonus scheme for its workers in spite of its Waterford plant recording post-tax profits of $255 million (€225 million) for that year.

Siptu said the bonus scheme is worth some €1,800 to each worker and that the unilateral decision by Teva to axe the payment for the second half of 2017 “caused hurt and anger in a workplace that had traditionally enjoyed good, positive relations”.

Siptu said it was a case of “won’t pay” rather than “can’t pay” by Teva.

More than 630 are employed at the plant and Siptu is representing its 350 members in the dispute at the Labour Court and the outstanding bonus scheme payments to Siptu members total €630,000.

Siptu told the Labour Court that the firm recorded profits of $255 million in 2017 and the Waterford facility “is the shining light of the company’s plants”.

The bonus scheme has been in place since 2005 and, at the end of 2017, Teva announced that, due to severe global circumstances affecting the firm, it was unable to pay what might have been due under the agreed scheme for the second half of 2017.

Teva told the Labour Court that the continuation of the scheme was dependent on group performance and said that, despite local success, in 2017 Teva’s debt reached $36.9 billion and by year-end was still $32.5 billion, with the latest reported level of $27.6 billion.

Teva said that its stock price had fallen from more than $70 in 2015 to $10.85 by end of 2017 and it had been erratic since then.

It stated that Teva worldwide suffered an operating loss in 2017 of $17.5 billion.

Considerable pressures

Israeli-headquartered Teva denied it broke the 2005 agreement over bonus payments as the agreement provided for the removal of the payments if they undermined the orderly management of the business.

Teva told the Labour Court that the company faced considerable pressures from generic medicines.

In its recommendation, the Labour Court has recommended that Teva pay the outstanding bonus payments for 2017.

The court stated it was satisfied that there was an agreement in place and that its terms were breached by Teva’s actions and that this dispute is best resolved by the company making any payments due in respect of 2017.

Industrial organiser with Siptu Allen Dillon said on Thursday that the Labour Court recommendation vindicates Siptu’s stance.

Mr Dillon said Teva management at Waterford had told Siptu that it was considering the recommendation and was engaging with stakeholders at a corporate level.