Cyprus Mail
Business Cyprus

Truce called on Co-op Central Bank cuts

By Elias Hazou

The Cooperative Central Bank (CCB) and the main bank employees union ETYK called a truce on Monday amid an escalating dispute on proposed pay cuts.

The CCB’s new CEO Marios Clerides and ETYK boss Loizos Hadjicostis spoke on the phone early in the afternoon, agreeing to talk again on Tuesday.

“They agreed to come back with alternative proposals to see how the impasse can be overcome,” ETYK official Christos Konomis told the Cyprus Mail.

The CCB wants to slash its payroll by 15 per cent to comply with its restructuring obligations, in place following its €1.5bn 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 to 25 per cent.

But neither agreement applies to employees of the CCB who are all members of ETYK, with which the CCB board had been holding separate talks.

Some 300 CCB employees are members of ETYK, as opposed to the some 2,700 staff in the broader cooperative sector who belong to other unions, mainly PEO and SEK.

After negotiations between the CCB and ETYK broke down last week, the former threatened to begin layoffs unilaterally.

The CCB management said it would ask each of the 300 employees to respond whether they individually accepted either the proposed pay cuts or a redundancy scheme.

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 move bypassed ETYK entirely, incurring the union’s wrath.

On Monday, employees at the CCB were to be given 24 hours to respond or else the bank would go ahead with the unilateral redundancies. The CCB management held a meeting with staff yesterday to present the restructuring plan. But it became apparent that the employees, on instructions from their union, held fast and did not take the bait.

It’s not clear whether the 24-hour ultimatum given to the employees and expiring today still stands, but Clerides and Hadjicostis will be making another effort to find common ground.

In a defiant circular meanwhile, the union called “raw blackmail” the CCB’s threat of redundancies, adding that the move violates the code of industrial relations.

Even if the redundancies were enforced, ETYK said, they would be null and void.

“No decision taken with a gun to the head is valid,” it added.

It further questioned the logic behind the threatened redundancies, noting that this issue was never raised before by anyone.

If anything, ETYK said, the CCB had been poised to hire more people, not fire them.

The union says it’s not in principle opposed to the prospect of pay cuts for the 300 workers at the CCB. But they want the other side to take into account that the CCB employees have suffered an approximately 4.5 per cent loss in income over the last two years by giving up Cost of Living Allowance and salary increments for the years 2012 and 2013, contrary to the rest of the employees in the broader cooperative sector.

Should the CCB employees now accept an additional 15 per cent salary cut, the cumulative reductions would amount to 20 per cent, the union argued.

Also pending is a separate deal on the renewal of collective agreements for employees at commercial banks.

As of July 2013, Bank of Cyprus (BoC) workers have on average conceded around 15 per cent of their income, but employees in other banks have seen virtually no salary reduction.

The employers ideally want an agreement in place before the next paycheques are made out.

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