By Angelos Anastasiou
THE CO-OPERATIVE central bank (CCB) has decided to cut stubborn bank employees’ union ETYK out of negotiations for pay cuts which have already been agreed with other unions PEO and SEK.
In a letter to Labour Minister Zeta Emilianidou, the CCB board has informed her of its decision, claiming that it has “been left with no other option” and citing ETYK’s intransigence during the talks as the reason for the breakdown in negotiations.
According to reports, Monday morning will see CCB management requesting each of the 300 employees to respond whether they individually accept either the proposed pay cuts or the redundancy scheme, leaving ETYK out of the picture altogether.
Should the number of volunteers fall short of the targeted 100, the CCB threatened to proceed with forcing the redundancy scheme on enough employees to achieve its 15 per cent cost reduction target.
The organisation has had to slash 15 per cent of payroll cost to comply with its restructuring obligations, automatically in place following its €1.5 billion bailout.
Following a deal clinched recently, workers at cooperative credit institutions took a 3.0 per cent cut on salaries across the board. Their unions also agreed to additional tiered salary cuts ranging from 8.0 per cent (for salaries between €1,001 and €1,500) to 25 per cent (salaries between €4,000 and €5,000).
But neither agreement applies to employees of the Co-Operative Central Bank who are all members of ETYK, with which the CCB board has been holding separate talks.
Some 300 CCB employees belong to ETYK, as opposed to 2.700 co-op employees who belong to other unions, mainly PEO and SEK.
A deal was also struck on a voluntary redundancy scheme that is expected to reduce staff by 10 per cent and help save €16.5 million for the co-ops in 2014 alone.
The reductions have reduced payroll costs, the largest item at 55 per cent of co-ops total operating budget, by the required 15 per cent.
Following a deadlock in the talks earlier in the week with ETYK, the CCB board decided yesterday to impose a voluntary redundancy scheme to reduce CCB staff by 100, from a total 300, in order to achieve the 15 per cent payroll-reduction goal.
The main points of contention in the deadlocked talks revolved around retirement age, and each side’s contributions to a special ‘solidarity fund’ for redundant employees.
ETYK wanted the retirement age to be extended to 65; it is currently 60. They argued that, until a few years ago pension age was 63 years, then it was decreased to 60.
It is understood that the bankers were opposed, which would have entailed concessions on their part to other demands put forward by ETYK.
But citing the bailout deal between Cyprus and international creditors, the employers indicated that they were willing to agree to raising retirement age to 65 from the year 2016.
On their part, ETYK were open to pay reductions for employees of all commercial banks. As of July 2013, Bank of Cyprus (BoC) workers had on average conceded around 15 per cent of their income, but employees in other banks have seen virtually no salary reduction. The employers, who wanted similar cuts across the board, would have to give ETYK something in return.
But what broke the camel’s back, leading to a halt in the talks, was ETYK’s demand that employers contribute an amount equal to 4 per cent of the payroll to a ‘solidarity fund’ for out-of-job workers.
Banks already pay 14 per cent into bank employees’ provident fund, and counter that an additional 4 per cent payout would drive up labour costs.
Unless collective agreements were renewed before the next pay cheque, the banks would have been forced to resume paying Cost of Living Allowance (CoLA) as well as salary increments. These had been suspended following an agreement reached during the previous collective agreement, but would presumably resume by default if matters remained in limbo.
Employers had wanted to slash their payroll as soon as possible, preferably before January pay cheques were written.
It’s understood also that the employers had been pushing for extended working hours, to which ETYK was fiercely opposed.
Finance Minister Harris Georgiades became embroiled in the dispute on Monday when, speaking to reporters, he said: “We cannot be the only country in the EU where banks stop servicing the public at 1.30pm.”
But following gripes by ETYK officials, the minister was quickly forced to backpedal, clarifying that he was only expressing a personal opinion.