Social partner agreement aims to tackle crisis in pharmaceutical industry

Social partner organisations in the chemicals sector signed an agreement in November 2008 introducing a number of ‘welfare to work’ measures for employees made redundant in the pharmaceutical industry. The so-called ‘Welfarma’ project has been welcomed by the signatories to the agreement; however, it has generated a dispute among organisations that did not sign but which are directly affected by its provisions.

During a meeting at the Ministry of Economic Development (Ministero dello Sviluppo Economico) on 20 November 2008, social partner organisations from the chemicals sector signed an agreement – referred to as the ‘Welfarma project’ – in an effort to equip the sector with ‘an operational instrument, voluntary in nature, and additional to the current bargaining and legal structures, with which to implement welfare-to-work solutions’. The signatory parties comprised: the National Pharmaceutical Industry Federation (Federazione Nazionale dell’Industria Farmaceutica, Farmindustria) on the employers’ side, and the Italian Chemicals, Energy and Manufacturing Workers’ Federation (Federazione Italiana Lavoratori Chimici Energia Manifatture, Filcem-Cgil), the Energy, Chemicals and Allied Industries Federation (Federazione Energia Moda, Chimica e Affini, Femca-Cisl) and the Italian Chemicals, Energy and Manufacturing Workers’ Union (Unione Italiana Lavoratori Chimica Energia Manifatturiero, Uilcem-Uil) on the trade union side.

The project aims to target pharmaceutical company representatives in particular and, in general, all employees of pharmaceutical companies that are planning restructuring and redundancies. The scheme will be piloted over two years, after which its results will be assessed and possibly revised.

Crisis in pharmaceutical industry

Italy’s pharmaceutical industry is undergoing a crisis, which, as declared by the President of Farmindustria, Sergio Dompè, ‘by the end of 2008 will produce 2,500 redundancies with an estimated 10,000 fewer jobs at the end of 2010’. At present, the industry has about 72,000 employees in Italy, with a large presence of foreign multinational corporations; only 31.2% of the companies are Italian-owned. Given the current economic climate, a number of companies in the industry have announced large job cuts for the next few years. For example, the British-owned pharmaceutical company AstraZeneca has declared that it will dismiss around 300 workers in the next few months (see the European Restructuring Monitor (ERM) factsheet on this announcement). Job reductions are also being planned by the US-owned companies Wyeth and Merck; the Italian research centre of the latter in Rome – known as the Istituto di Ricerca di Biologia Molecolare (IRBM) P. Angeletti – is due to be closed, resulting in the dismissal of 300 employees.

These examples are among a number of cases which demonstrate the negative impact that the industry’s crisis is having on companies. Such effects are attributed to various factors including: the expiry of important patents, which will reduce the profitability of certain medicines; and cutbacks in national healthcare expenditure, which in 2007 led to a 7.5% decrease in the prices of reimbursed prescription drugs. Moreover, in some regions, the amount of consultation time between doctors and pharmaceutical company representatives has been reduced.

Objectives of Welfarma initiative

Under the Welfarma project, the social partners and the government have declared their intention to act jointly to assist, retrain and outplace workers made redundant in the pharmaceutical industry. For this purpose, a permanent committee has been established at the Ministry of Economic Development to evaluate ‘the sector’s economic situation with particular regard to its repercussions on employment, and to devise active policies’.

The workers dismissed by companies belonging to the Welfarma project will receive assistance in finding employment either in the pharmaceutical industry or similar industries, in other economic sectors, or in starting a business.

At national level, with the participation of the various actors involved, an observatory will be created to monitor the labour market situation and the geographical distribution of the workers seeking to relocate. The various parties concerned include the signatory social partners, the companies themselves, the unitary workplace union structure (Rappresentanza sindacale unitaria, RSU), the workers, the Ministry of Labour, Health and Social Policies (Ministro del Lavoro, della Salute e delle Politiche Sociali) and its technical section, and the employment agencies. At company level, the measures used to address internal employment difficulties will be defined in detail.

In accordance with the agreement, implementation of the Welfarma project will involve a number of stages, as follows:

  • statement by the company that it intends to restructure;
  • discussion with the trade unions;
  • agreement – possibly providing for activation of a Welfarma scheme;
  • implementation of the measures agreed – such as a mobility or availability list (lista di mobilità) or a wages guarantee fund (Cassa integrazione guadagni, CIG);
  • selection by the company of an employment agency;
  • implementation of the agency’s activities.

In relation to the latter point, the agreement does not specify what the employment agency’s ‘activity’ will comprise.

Reactions to agreement

The signatory social partners have expressed their satisfaction with the agreement reached. The National Secretary of Femca-Cisl, Gianluca Bianco, described it as an agreement ‘based on the principles of corporate social responsibility and employability’. However, the Welfarma initiative has sparked a row among organisations that have not signed the agreement but which are directly affected by it.

The Italian Association of Pharmaceutical Representatives (Associazione Italiana Informatori Scientifici del Farmaco, AIISF) has criticised the agreement. In an official statement, its national executive declared that it ‘does not believe in the Welfarma project, deeming it an initiative disrespectful to the institutions, and damaging for pharmaceutical representatives’. As a result, AIISF is contesting various aspects of the project. For instance, it is opposed to the possibility that redundant workers may be relocated to industries other than pharmaceuticals; it is also sceptical about the actors involved in the possible implementation of Welfarma. The professional associations AIISF and the Federation of Scientific Information in the Pharmaceutical Industry and of Scientific Information Associations in the Pharmaceutical Industry (Federazione degli Informatori Scientifici del Farmaco e delle Associazioni degli Informatori Scientifici del Farmaco, Federisf) are in fact excluded from the project, although they may take part in regional discussions. AIISF is also proposing that, during the project’s implementation, the agreement reached at company level should be submitted for approval by all the workers.

Commentary

The Welfarma project, and the dispute involving actors affected by the agreement but excluded from the bargaining process, once again highlights the need for a law on trade union representativeness and representation – at both national and company level.

Manuela Galetto, Fondazione Seveso

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment