THE GENERAL impression given by the weekend speech of Loizos Hadjicostis, the leader of the bank employees union ETYK, was that he is running the Bank of Cyprus.
Not only did he tell his members that the bank’s work force would be reduced by 20 per cent, at least initially, but also that the redundancy scheme would be voluntary. He did not explain what would happen if inadequate numbers were willing to take up the offer of early retirement.
The retirement scheme could not be implemented as long as the bank did not have a CEO, he concluded, warning that the lack of leadership was weakening the bank and pushing it towards catastrophe. His worries are over now, as a new CEO has been appointed.
However, the union boss ignored to mention how his union’s meddling also made the bank’s restructuring more complicated. By persuading the Central Bank to transfer the entire Laiki Bank workforce to the Bank of Cyprus, an unheard of practice when a company has gone bankrupt and its operations taken over, he is not contributing to the quick restructuring that would avert the catastrophe he fears.
But as Hadjicostis is a union boss working for the ‘interests’ of his members nobody questioned this irrational decision, which has almost doubled the employees of the Bank of Cyprus for the last two months, at a time when cost-cutting should have been the priority. It also created the absurd situation in which the employees of a bankrupt bank have the opportunity to take the jobs of the workers of the healthy bank. And the ETYK boss has been putting pressure on the management of the Bank of Cyprus not to discriminate against Laiki’s employees by protecting its own.
In effect, Hadjicostis is trying to dictate to the bank how re-organisation and restructuring would take place. He has demanded the option of voluntary retirement being extended to all the bank’s employees. He has also decreed that bank employees would be paid the full provident fund they would have been entitled to before the haircut, regardless of the fact that this would cost the Bank of Cyprus an additional €91m it cannot afford.
It is time this arrogant union boss, who acted as the most enthusiastic cheerleader of the man who bankrupted Laiki, Andreas Vgenopoulos, was put in his place. He cannot still be allowed to call the shots because his union’s interests are not the same as the bank’s, which he supposedly wants to save.
To survive, the Bank of Cyprus might need to get rid of 40 per cent of its work-force, the majority of which would have to be bankrupt Laiki employees, and impose pay cuts (Hadjicostis does not oppose this). It has no obligation to offer voluntary redundancy to all staff and no legal obligation to pay out €91m to cover the losses of the ETYK provident fund.
This is what needs to be made clear to ETYK by the Bank of Cyprus board and the new CEO. It must understand the days when it was calling the shots are over for good.