Lek Staff Underpaid by €100mn for Last 20 Years

By , 14 Jul 2022, 13:10 PM Business

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STA, 14 July 2022 - Pharmaceutical company Lek has discovered an error in its calculations of wages which led to its staff being underpaid in the last 20 years by a combined total of about EUR 100 million. The company said it would reimburse all current and former employees for the last five years, as determined by law, with default interest for the last three years.

The error was discovered when the company switched payroll accounting providers and the new provider carried out a due diligence with an auditor.

Mistakes were detected in the calculation of allowances for absences from work such as holidays, sick leave and other forms of paid absence, and there were errors in the calculation of allowances for shift work, night work and for working in adverse working conditions.

According to the company, a thorough analyses was conducted to see which employees had been affected. "Social partners were included in the process of analysis from the very beginning," the company said.

Remedial measures were introduced on 1 May to compensate current and former employees for their losses since 1 January 2017. Employees will also receive interest for the money they should have received in the last three years, since 1 January 2019, Lek said.

Commercial broadcaster Kanal A reported last night that at least 3,000 employees had been affected since 2003, when Swiss pharma giant Novartis took over Lek, and some of the workers got about EUR 100 less a month because of the error, while the total damage had been estimated at about EUR 100 million.

Lek did not confirm these figures today.

An employee told Kanal A the staff had not been notified of the error until March. They demand compensation for the entire 20-year period. Under the law, they can claim back pay for only the last five years.

Kanal A reported that the pay slips at Lek in the last 20 years have been so complex that none of the employees was able to calculate or check the correctness of the pay calculation, which the in-house trade union confirmed in a letter to the employees earlier this year.

"There is reason to suspect that irregularities in payment out of wages, compensation, and the calculation of allowances have gone on for even longer. Lek has not actually denied this either," Rosana Lemut Strle, a lawyer for the employees, told Kanal A.

She hopes Lek will offer workers more than what they are legally entitled to.

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