At the time of IFC appraisal, Genomma had 832 employees: 537 in Mexico, 98 in Argentina, 55 in Brazil, 36 in Colombia and the rest evenly distributed among Peru, Chile, Ecuador, United Sates and Central America. Fifty nine percent of Genomma’s workforce are women. Current workforce is primarily involved in marketing, logistics, sales, and overseeing the co-packers and contract manufacturers. Annual employee in 2016 turnover was 33% (37 % in Mexico and 21% in the remaining countries). Besides the manufacturing of OTC and PC products, a large percentage of its logistics and sales operations are currently outsourced to third parties – the number of such third-party workers is estimated at 486. Going forward, once the proposed project is operational, the company expects to add up to 7% full time employees in Mexico and 38% third-party employees to its workforce.
Human Resources Policies and Procedures:
Genomma has documented policies and procedures for recruitment, selection and hiring, training, promotions, performance evaluation, work-life balance, and diversity and inclusion. The HR team is based in Genomma’s headquarters in Mexico City and one person is located at the distribution center in Toluca. Comprehensive training programs are planned annually by HR in coordination with the different areas (e.g. quality, logistics, OHS).
Working Conditions and Terms of Employment:
All employees receive written contracts, which include information on hours of work, compensation, contract duration, and rest days. Salaries are well above national minimum wage, and no problem of excessive overtime was identified. In Mexico, a collective agreement and its accompanying internal regulations, establish the terms and conditions for blue-collar workers in the distribution center. These documents provide information on workers’ benefits, rights and responsibilities, and disciplinary procedures. The company’s internal regulations related to HR management are consistent with the requirements of Mexican labor law and IFC PS2. Genomma will ensure that collective agreements and internal work regulations are provided to all workers at time of recruitment and are always accessible to them (ESAP action item # 7).
Workers Organizations:
Genomma has signed an agreement with the Workers Trade Union of the Republic of Mexico (Federación Obrera Sindical de la República Mexicana). All blue-collar employees are required by law to join the existing Union as soon as they are hired by the company, effectively restricting their ability to elect a union of their choice or to form other unions. To comply with the intent of this Performance Standard, Genomma will not restrict workers from developing alternative mechanisms to express their grievances related to working conditions and protect their rights.
Non-Discrimination and Equal Opportunity :
Genomma has a corporate code of conduct communicated to all employees, suppliers and service providers . The code of conduct includes provisions on non-discrimination and equal-opportunity, and the commitment to provide a working environment free of harassment. The document also provides a whistle-blower channel ( www.resguarda.com ) to report any infringement. All grievances received through Resguarda are reviewed by Genomma’s Ethical Committee. While the committee originally received training on what constitutes illegal discrimination and which type of behaviors are considered harassment, most of the original members have changed and new members have not received any training. In addition, neither the code of conduct nor the employee induction training, provide guidance on the subject. Genomma will review its Code of Conduct and employee training, including training for Genomma’s Ethical Committee, to provide better guidance on what constitutes discrimination and harassment (including sexual harassment), and in which situations a complaint is admissible (ESAP action item # 8).
Retrenchment:
The proposed investment will not trigger any collective dismissal. On the contrary, the new facility will require about 200 new employees. Genomma’s distribution center will also be relocated to the new facility, which is 50 km away. Genomma will provide transportation free of charge for all workers to the new distribution center, but it is possible that some of them decide to terminate their contractual relation due to the long commute. In this case, Genomma will ensure that workers receive the severance payments mandated by law and the collective agreement.
In 2016, Genomma implemented a comprehensive training program in the distribution center increasing employee productivity by 60% compared to the previous year. Because of the increased efficiency, there was a 36% reduction in personnel. Terminated employees received all severance payments mandated by law. If job positions are available once the distribution center is relocated, Genomma will notify retrenched employees and, to the extent possible, prioritize them for hiring.
Grievance Mechanism :
Genomma retains the services of an independent company (Resguarda) to provide confidential and anonymous communication channels. While this whistle-blower mechanism is crucial for the companies with global reach and a high number of suppliers and service providers, such system is not always adequate to handle internal workers’ complaints regarding their terms of employment and working conditions. Also, the effective use of this whistle-blower communication channel has been limited so far (only three grievances were received in 2016) and workers still raise concerns through various informal channels. Genomma will implement a system to keep track of any suggestions and complaints presented by workers and resolutions taken to analyse trends use the information to adopt corrective measures. The company will also analyse if additional confidential and anonymous communication channels (e.g. suggestion boxes) need to be implemented (ESAP action item # 9).
Protecting the Work Force :
Genomma does not employ minors or any type of involuntary or compulsory labor. Genomma’s suppliers and service providers commit to adhere to Genomma’s code of conduct, which includes provisions against the use of child and forced labor.
Workers engaged by Third Parties :
Under Mexican Labor Law, companies are jointly liable (“responsable solidario”) for any defaults of the suppliers and service providers with regards to the payment of wages and social security obligations. Therefore, contracts with suppliers and service providers include provisions to guarantee that their workers have been hired legally and receive wages and benefits as established by law. The suppliers and service providers are also obliged to present under request, documents that certify the payment of wages and to the social security system. Genomma controls the payment of social security obligations by all its contractors semi-monthly.
Occupational Health and Safety:
Genomma’s distribution centre has implemented an effective OHS management system, which is reflected in a sharp decrease in workplace accidents (from 11 injuries and more than 200 lost work days in 2015 to only 1 injury and less than 8 lost work days in 2017). The Safety Officer has involved workers in root-cause analyses of accidents, and safety issues are discussed with all personnel during weekly team meetings. Based on the analysis of accidents and risks, the Safety Officer has organized multiple hands-on training (e.g. proper lifting techniques, training for forklift operators, active pauses). In addition, areas of improvement have been identified based on the emergency response to the multiple earthquakes that took place in 2017. Good housekeeping practices, clean welfare facilities, and workers using adequate personal protective equipment (e.g. helmets, steal toe boots, reflective vests) were observed during IFC site visit. Genomma’s headquarter does not have a Safety Officer but has trained emergency brigades.
Genomma will implement an EHS management system in the new facility, which considerate the OSHAS 18001. This will include a workplace exposure monitoring plan (e.g. exposure to noise, chemicals); results will be reported to IFC as part of the Annual Monitoring Report (AMR).
