Royal Exchange Assurance

Tom Nevins approached me recently enquiring whether I would provide him with a note on our association, which I am pleased to do.

Following the acquisition of the GRE Group by the AXA Group in 1999, a strategic review of international operations was carried out. Arising from this it was decided to withdraw the Royal Exchange Assurance from business in Japan as of 1st January 2000. Effectively this called for the early retirement of all local staff from the 31st December 1999 and the re-engagement of a small run-off team from the 1st January 2000.

From the outset the strategy was to keep staff fully informed of the reason for the withdrawal and to assemble a compensation package which was both fair and just. To avoid any suggestion of bias it was also decided to employ an independent human resources consultant. His role was to advise on current employment conditions and to negotiate the compensation package through the Union representing the staff.

We chose Tom Nevins of TMT Inc., whose working background matched our needs. His comments and suggestions were valuable and in particular the recommended timetable and the direct involvement of the Tokyo Labor Relations Commission in the final discussions with the Union representatives.

Considerable thought went into assembling the compensation package as it was to be promoted as a best one-time offer. As such it had to stand on its own against other compensation packages in the market which were geared to removing costly older staff from payrolls.

There were the inevitable arguments from the Union representatives who had difficulty accepting the one-time offer concept. Tom, assisted by two of my senior managers whose own compensation packages had been capped by the formula used, successfully argued the fairness of the package and agreement was reached with the Union through the Tokyo Labor Relations Commission.

From previous encounters with Union representatives I was aware of the need to avoid one-on-one confrontations between management and staff particularly on such a sensitive issue. By keeping staff aware of the position, preparing a fair package and in particular engaging independent professional help we came to an amicable agreement with the staff seven weeks after the initial meeting with Tom Nevins.

Edward C. Francis
General Manager
June, 2001