GSK Union Threatens Strike over “unacceptable” Pay Offer

25.04.2022 - British drugs giant GlaxoSmithKline is facing what could be the first industrial action in its history. Some 86% of its employees organized in the trade union Unite at manufacturing sites across the UK voted last week to go on strike, rejecting a pay increase of 4%.

GSK management had initially offered 2.75%.  Both offers were below inflation, the union said, and stressed that it had declined to present either to its members for consideration. At the weekend, workers were waiting for the company to make a third offer on threat of prolonging the strike.

In a statement, Sharon Graham, Unite general secretary, called the offer unacceptable. “Never before have our members at GSK voted for strike action — their anger is a clear response to the company’s colossal corporate greed,” she said.

Saying union members at the company have delivered “a huge mandate” in favor of strike action, the union’s national officer Tony Devlin said that, “even at this late stage Unite has offered GSK a small window in which to make an improved offer and to avoid the inevitable disruption to production.”

 Strikes are unusual in the pharmaceutical industry, but it is the second time Unite has threatened action at GSK following difficult negotiations. In 2021, the drugmaker initially said there was no budget for any increase, but later proposed a 2% rise as well as other benefits to avert a walkout.

According to reports, some 700 of GSK’s 3,500-strong manufacturing staff (out of 13,000 nationwide) are members of Unite. A smaller trade union, GMB, with about 175 members working for GSK, did not vote to strike.

An industrial dispute would put additional pressure on Glaxo’s CEO,  Emma Walmsley. With activist investor US hedge fund Elliott Management trying to leverage the spinoff of the company’s consumer health business (into a new company called Haleon) to win concessions, she already has her back to the wall.

Citing years of the stock’s underperformance, Elliott has been leaning on GSK for some time to improve its remaining pharma and vaccines business. Up to now, it has unsuccessfully tried to leverage Walmsley out of her chair.

The UK was once a hotbed of industrial disputes in the UK but these have been far fewer in recent years. However, under the threat of soaring inflation – which hit a 30-year high of 7% in March and amid a tight labor market – the picture may well be changing, observers suggest.

Research group XpertHR has calculated the average 3% pay award in the UK between December 2021 and February 2022 to be the highest since 2008, but still well below consumer price inflation.

Author: Dede Williams, Freelance Journalist