Social.

Employee Relations and Communication

Effective communication with employees is important and in particular, face to face dialogue. Communication is exchanged through in house magazines, attitude surveys, regular news bulletins, presentations to staff and team briefings. Employees are also encouraged to access the group’s corporate intranet, sustainability intranet and website.

As part of our ongoing programme of employee attitude surveys, this year our Process Technologies business carried out a survey among its 1,200 employees around the world.

Employee involvement is a critical factor in the development of an improvement culture. Employees at all levels are making a major contribution to the success of our many lean manufacturing initiatives around the world which provide an excellent opportunity for staff engagement.

The company continues to support employee share ownership and employees have the opportunity to participate in share ownership plans, where practicable. Under these plans, employees can buy shares in the company which are matched by a company funded component. Employees in six countries are able to contribute to a company share ownership plan or a 401k approved savings investment plan. Through these ownership plans Johnson Matthey’s current and former employees collectively held 1.84% of the company’s shares at 31st March 2011.

Johnson Matthey also sponsors pension plans for its employees worldwide. These pension plans are a combination of defined benefit and defined contribution pension arrangements, savings schemes and provident funds designed to provide appropriate retirement benefits based on local laws, custom and market practice.

Regrettably, during the year, as a result of business circumstances, Johnson Matthey entered into consultation with employees at two facilities regarding the potential closures of those sites.

At the end of March 2011, the group formally closed its Vertec business, based at the Haverton manufacturing site in the UK, which had been loss making for several years. Prior to the closure of Vertec, the company engaged in a comprehensive process of consulting with employees, taking steps to limit the number of compulsory redundancies and establishing a consultative committee made up of employee representatives from all parts of the business. Following the decision to close Vertec, we then worked to mitigate the impact of the closure on employees through redeployment within Johnson Matthey and by providing outplacement support and training. This was challenging as a significant number of Vertec’s 51 employees were manufacturing technicians and the only similar available opportunities were at Johnson Matthey’s Royston and Clitheroe sites in the UK, both a considerable distance from Vertec’s base at Haverton. By the time of the closure, nine employees were made compulsorily redundant with others either volunteering to leave or being redeployed in Johnson Matthey’s other businesses in the local area. The average training and outplacement costs for the nine employees was £1,700 per person.

Alongside these steps taken to mitigate the social impact of the closure of Vertec, Johnson Matthey is also working closely with consultants and the local regulatory and environmental agencies to ensure the Haverton site poses no threat to future users and can be used to positively benefit the local community.

As a consequence of overcapacity in our Emission Control Technologies (ECT) business’ European manufacturing base, at the end of January 2011 it was announced that ECT had entered into statutory formal consultation with the works council and employees at its facility in Belgium, regarding the potential closure of its manufacturing plant in Brussels. Working closely with the unions and works council, we were able to reach agreement on a social plan that included redundancy payments, early retirement options, outplacement and retraining. Full closure of the site was confirmed in June 2011. The process of decommissioning has now started and is expected to last approximately one year.

Read more about employee engagement and communication.