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GSK China scandal leads to staff conflict

Published on 11/03/15 at 11:54am
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Around 135 workers who face being removed from their posts by GlaxoSmithKline due to misconduct centering on bribery scandals in China plan to dispute the decision.

GSK has confirmed it took disciplinary action against staff whose conduct contravened its values and code of conduct, but has not specified the numbers involved. Although it wasn’t long ago that the firm was responding to rumours of unrest and denying jobs cuts in China.

A Chinese health official linked to the GSK bribery scandal was also recently sentenced to 19 years in prison for misconduct that had taken place before mid-2013 in the country. GSK is alleged to have paid out around £320 million in bribes to doctors and hospitals, and other executives linked to the scandal were given suspended sentences and expected to be dismissed.

But these recent mass dismissals follow detailed investigations into wrongdoing by employees in the wake of the corruption scandal, which have damaged the firm’s reputation and hit its business in what is a fast-growing emerging market.

And now 135 or so employees dispute the London-based company’s decision to sack them, and around half of those according to Bloomberg plan to take their complaint to Chinese labour authorities.

The workers say in a statement that GSK “acted without producing any evidence of compliance violations to the employees, and did not offer any compensation or reasonable communications”. They are said to be seeking to negotiate compensation, resume employment and recover their reputation.

The unrest arrives as GlaxoSmithKline's planned major assets swap with Novartis has just completed, seeing both firms overhaul of their businesses. The multi-billion dollar contract involves GSK acquiring Novartis' global human vaccines business (except the influenza vaccines unit) for $7.1 billion, and Novartis taking over GSK’s oncology portfolio for up to $16 billion.

Other notable head changes at the firm recently have seen Sir Christopher Gent step down early as chairman of GSK in May to be succeeded by The Royal Bank of Scotland’s Sir Philip Hampton.

GSK still faces separate probes under the US Foreign Corrupt Practices Act and the UK antibribery law – related to the China bribery conviction.

Brett Wells

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