early March, Gorenje was transformed from a joint stock company into a limited
liability company, in order to simplify its corporate governance and pave the
way for more efficient management and decision-making within the Group that
will thus be better positioned to respond promptly to the challenges and
changes in a demanding business environment, to reap the synergies with
Hisense, and to cut its operating expenses. Hence, business transformation will
be the priority task in all fields of our operations in the months ahead.
Therefore, the company Gorenje d.o.o. started in early April, as a part of a
batch of measures for improvement of business efficiency, the procedures for
reorganizing the business processes at the level of the entire Group, which also
includes new organization and job systematization at the parent company.
Reorganization and business optimization
will not be restricted to the parent company; rather, they will also include
all our subsidiaries and international business units. Some Gorenje sales
companies abroad are already being integrated with Hisense sales companies.
Thus, mergers have already been completed in Great Britain, France and Italy,
while mergers in Russia and the Czech Republic are under way. Moreover, we will
integrate into Gorenje the European part of Hisense International, including
the TV set factory in the Czech Republic.
As a result of business transformation and
restructuring, merging of functions, decreasing the number of management
levels, and business optimization, the number of employees at support services
in the Group will be decreased. The company shall seek to do this by so-called
soft methods (retirement); for the jobs that the company finds are no longer
required, however, labour contracts will also be terminated. Pursuant to the
law, Gorenje is required to prepare a redundant worker lay-off program if more
than 30 workers are laid off within 30 days; Gorenje will comply with this
provision. In this process, we consistently comply with the notification procedures
and consultations with the trade union and works council as provided in the
relevant laws and both industry-wide and company collective labour agreement,
and with the rules on participation and the role of the Employment Service of
Slovenia, on the specification of criteria for determining the redundant
workers, and on program composition.
The company has already sent its proposals
for reorganization to the trade union and the works council. The trade union
submitted in writing their opinion on the presented reorganization proposal,
and the company formed in writing its position regarding the trade union's
response. Pursuant to the law and the collective labour agreement, we held on
April 17 joint consultation with the trade union and the works council, at
which the employer presented the planned organizational and human resource
changes, while the trade union and the works council presented their respective
positions, notes, and expectations.
Unresolved issues from this consultation
were addressed on April 23 by the Committee of Chief Managing Directors. The
session was also attended by the chairmen of the trade union and works council,
and the labour director. The trade union and the works council had received for
their perusal the proposed agreement on the criteria for determining redundant
workers. The company namely includes in all reorganization activities both the
trade union and the works council. Consultation on the said criteria was
scheduled for April 25, but the trade union and works council rejected the
consultation on the worker redundancy criteria and announced that they would
not take part in further consultations with the employer; as a result, an
agreement on the worker redundancy criteria has not been reached.
Despite such decision, new organization,
final wording of the rules and regulations on organization, management and job
systematization, complete with job catalogue, will be adopted presumably in the
first half of May. In the next step, the employer will, pursuant to the provisions
of the Employment Relationships Act, adopt the criteria for specifying worker
redundancy and the draft Program for laying off a large number of redundant
workers. In our estimate, the program will include 270 redundant workers from
Gorenje d.o.o., or good 6% of the current 4,212 employees. We shall seek to
reduce this number with measures for prevention and restriction of lay-offs.
The company also informed the trade union
and the works council in writing on April 24 about the intended regular
termination of employment contracts for business reasons for a large number of
workers. After the submission of the draft redundancy program, the company will
invite both the trade union and the works council, regardless of today's
negative response, to a consultation on the possible ways to prevent and
restrict the number of lay-offs and on the possible measures to prevent and
alleviate the harmful effects.