Labor, management clash again in Takeda Korea, over wages this time

Takeda Korea, which experienced severe labor-management conflict over selling some business units for restructuring after acquiring Shire in 2020, is showing signs of renewed conflict -- over wage negotiations this time around.

The Korea Democratic Pharmaceutical Workers' Union’s Dakeda Korea branch recently applied to the Seoul Regional Labor Relations Commission for wage adjustment.

According to the Takeda Korea union, the existing wage agreement expired in May last year, and labor and management began negotiations to renew the wage agreement in late July. However, despite 11 rounds of wage negotiations, the company deliberately neglected the bargaining amid little progress, it said.

“The management sticks to its unilateral position that it would resume wage negotiations only condition of the union accepting the company’s proposal for the ‘one-time payment’ as the concrete wage payment method to be applied to all employees,” the union said. “Since the management introduced the one-time payment system in 2022, it had never explained what it is until the union called for it.”

According to the union, the one-time payment system arbitrarily divides employees’ wage levels into three groups per rank and sets an upper limit for each group. If some employees’ wage levels exceed the ceiling, the company limits basic annual salaries and performance-related pay to it and gives the excess portion in the form of bonuses or other one-off lump-sum payments.

The union added that this formula limits the basic salary and performance pay levels, pulling down the average wage as the basis for wage raises compared to the previous year. It also lowers the basis for wage increase rate, dragging down the absolute wage level that individual workers can receive regardless of the performance they have achieved, equivalent to disadvantageous changes in working conditions, the union emphasized.

“If these employment rules are changed unfavorably to workers, the company must obtain consent from a majority of the workers. As the employment rules changed unfavorably without consent are invalid, the management must apply the previous employment rules,” it said. “Although workers suffer disadvantages due to changed systems and wage-related matters, the company decided to introduce a new system without any explanations or winning the consent of most staff. Therefore, the company’s introduction of the one-time payment system is invalid by violating the Labor Standards Act itself.”

Takeda Korea union, judging that wage negotiations cannot be carried out on the premise of such an illegally or unfairly changed wage system, requested specific data on the wage range and coverage of the one-time payment system to be applied by the company to specifically examine whether disadvantages arise due to the introduction of the system. However, the company refuses to disclose it because the payment system is simply a guideline from the global headquarters and falls under the company's confidentiality, and continues to reject the union's compromise proposal to discuss wage increases aside from the one-time payment, it said.

As the labor and management failed to narrow differences despite 11 rounds of wage negotiations, the union denounced the management's bargaining behavior as "not negotiation but coercion" and declared the breakdown of the negotiations.

“The management negotiators have no will to engage in negotiations carefully and just wait for the union to get tired,” a union official said. We cannot positively respond to such forced negotiations and will crush the oppression of the union by using all means in response to the management's lax stance."

The official said, "Currently, the union has completed an application for wage adjustment to the Seoul Regional Labor Relations Commission. However, unless the company identifies its position on the one-time payment system and clarifies not to introduce it, we will not hesitate to take collective action."

Takeda Korea said it has been "faithfully and transparently engaged in employee communication."

"Nevertheless, it is regrettable that the current situation has occurred," a spokesperson at Takeda Korea said.

The company will continue to negotiate the salary increase with the labor union with an open attitude and faithfully participate in mediation, it added.