workplace: news
Ulster Bank offers 10% ‘bribe’ to staff to accept inferior conditions
IBOA - THE FINANCE UNION
www.iboa.ie
www.iboa.org.uk
Future pensions at risk under new arrangement
22
Since the beginning of this year, RBS’s Irish subsidiary, Ulster Bank Group, has sought over 1,000 redundancies on a voluntary basis. The reward for staff for co-operating with this restructuring of the Group has been an unprecedented move from the Bank which offers to pay staff a 10% lump sum (which has been withheld for most of the year) in return for their agreement to a new contract involving a significant worsening of their terms and conditions of employment and especially their pension arrangements. The treatment of Ulster Bank staff contrasts with that of the majority of clerical staff elsewhere in RBS who have received the 10% payment backdated to March of this year and without pre-conditions. The Irish-based staff in other RBS subsidiaries, such as Lombard, RBS Technology Services and InterGroup also received the 10% payment without pre-conditions. Even though it has been accepted that this payment is contractual, Ulster Bank has insisted on demanding claw-backs from staff as a pre-condition for its payment. These claw-backs involve a number of changes in the terms and conditions of employment – including: • a significant increase in management discretion over the payment of various
september 2009
elements of the overall remuneration package; • a dramatic lengthening of the time it takes for staff to progress to the top of their salary scale and; • most seriously, a major change in pension benefits which has been constructed to affect younger staff significantly more. As well as closing the existing Defined Benefit scheme to new entrants after November 1, the Bank also proposed that in future, regardless of the level of any actual pay increases (including those achieved as a result of promotion), annual increases in “pensionable pay” will rise by 2% or in line with inflation (whichever is the lesser). Over time the cumulative increase in pensionable pay is likely to fall increasingly out of line with the cumulative increase in actual pay with the result that, on retirement, the value of the pension would be considerably less than would otherwise have been the case. None of these proposals were agreed with IBOA. Indeed many of them were not even discussed with the Union – or even the Pension Fund Trustees – since the Bank’s senior management decided to withdraw from the previously agreed mediation process
under Mr. Kieran Mulvey and put its proposals directly to the staff with a deadline of just over two weeks for them to decide on the new contracts – including complex new pension arrangements. In the event the Bank claims that a majority of staff in both the Republic and Northern Ireland opted to accept the new contracts. However, the Union is aware that many staff were subjected to intense pressure to accept: some who the Bank has claimed to have accepted clearly have not; while others who have accepted now wish to rescind their decision. The Union provided legal and actuarial advice to members in each jurisdiction on the implications of the new contract. The Union has also embarked upon legal action in each jurisdiction aimed at proving that the 10% allowance and other payments are guaranteed under the existing contract and must be paid to those staff who rejected the new contract. The Union is also taking another case in Northern Ireland on the grounds that the Bank’s action in offering staff a reward for accepting fewer workplace rights constitutes an inducement to forgo their entitlement to collective bargaining which is illegal under British law.