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Our View: Banks need to stand firm against union

HIGH unemployment has eroded the power of the unions in the private sector making them much more co-operative and constructive in their dealings with employers. In the public sector, however, the union remains as strong as they have always been which is why all the industrial disputes, strike threats, overtime bans take place in this part of the economy which, ironically, has been the least affected by the recession.

Only in one part of the private sector has the union remained as militant and arrogant as it had always been – banking. And this is because bank employees were well-protected from the consequences of economic crisis, despite the fact that it was caused by the banks. Despite pay-cuts, they are still the best rewarded workers in the private sector, the relatively few redundancies were voluntary and very generously compensated, retirement bonuses remained intact and jobs were as secure as in the public sector.

In a way, this was a show of strength, in difficult times for the industry, by the bank employees union, ETYK, which had been imposing its diktats on weak and cowardly bank management for decades. What ETYK failed to grasp was that after 2013, the banking sector has drastically changed – the main shareholding of the two remaining Cypriot banks was held by foreigners who recruited foreigners as chief executives – and its bullying tactics and blackmail were unlikely to be as effective as they had been in the past.

They are gradually finding this out. The Bank of Cyprus withdrew from the Bank Employers’ Association and was followed by Hellenic Bank which meant an end to the collective bargaining that allowed the union to impose its pay and other demands at all banks. Now, Hellenic and BoC will each negotiate separately with the union, which seems intent on fighting against any change by management.

From Monday, ETYK imposed an overtime ban at Hellenic because the bank had been appointing managers without the union’s consent, as had been the past practice, especially at BoC and Laiki.

It has argued that this was a violation of the workers’ rights and of procedures. What nonsense. There is no moral, economic or legal justification for this absurd arrangement as Cyprus is not a socialist republic run by a dictatorship of the proletariat. And the banks are public companies, not workers’ co-operatives.

It is unheard of, in any properly functioning market economy, for unions to have a say in promotions or appointments of managers. This is the prerogative of the board, which represents the interests of shareholders, and the chief executive appointed by it. Unions have no shareholding in banks and therefore should have no say. ETYK, accustomed for decades to calling the shots, refuses to accept this reality, because it knows that losing this right would weaken its hold over bank-employees and diminish its strength.

This has already happened at Hellenic where none of the 20 top managers are members of the union. Once bank employees were made to understand that union membership adversely affected their career prospects, much fewer would join ETYK. Hellenic Bank has made the right decisions, but it now needs to stand firm, if its objective is to end union rule.

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