Cyprus Mail

SEK, PEO Pasydy accept Co-op scheme, slammed by Etyk

By Stelios Orphanides

Three unions of the failed state-owned Cyprus Cooperative Bank agreed Thursday to accept the Co-op’s improved voluntary retirement scheme which bank workers’ union Etyk criticised for not being generous enough.

The new proposal, accepted on Thursday by representatives of SEK, PEO and Pasydy “is clearly improved and covers almost all issues we raised in our meetings,” said Savvas Toulloupos in a telephone interview adding that the maximum amount of compensation was increased from €170,000 to €180,000.

The Co-op’s latest proposal, presented to the unions on Wednesday, also addresses issues related to healthcare coverage, insurance and loans extended to those 900 Co-op workers who will opt to take advantage of the scheme and leave the bank by September 1, the PEO union representative said.

“As we consider it satisfactory, we will recommend to our members to consider it and decide themselves whether they want to take advantage of it,” he said.

The scheme was made necessary after Hellenic Bank last month agreed to acquire the operations of the Cyprus Cooperative Bank after the latter failed to sufficiently reduce its non-performing loans and stay in business. Along with certain assets and liabilities of the Co-op, Hellenic Bank will continue employing 1,100 workers of the less than 2,700 workers at the state-owned bank. Around 500 workers will continue working for the legacy Co-op which will be tasked with collecting €7bn of its non-performing loans. After the transformation of the residual Co-op into a non-performing management unit, it may also acquire bad loans from other banks.

Toulloupos said that the compensation paid out to Co-op workers will be 26 per cent of a worker’s years of service times his or her gross annual salary and added that in certain cases, when a worker is required to stay for a transitional period to help the transition, that will also be possible.

Etyk, traditionally known for its militant rhetoric, said that it had doubts about the scheme’s success as it did not provide for a minimum compensation of €100,000, while its position of putting the cap at €200,000, matching similar schemes proposed by other banks in the recent past, was ignored.

“The fact that in the initial talks, the bank was estimating the minimum (compensation) amount at €40,000, before scrapping it altogether, is noteworthy,” it said.

As a result, the scheme is unappealing to low earners and younger staffers, Etyk added.

Etyk also said that the pay-out of the compensation in four tranches to retiring workers instead in one single payment was also a factor that could weigh negatively in the workers’ decision.

“This raises a big question whether after one-and-a-half years there is a guarantee that the Cyprus Cooperative Bank will be able to pay out a few tens of millions (of euros),” it said.

Etyk said that after it evaluated the proposal it concluded that it was lacking in many areas, to be successful.

“Still, every colleague has to evaluate the scheme on his own and depending on his situation, needs, employment changes etc., should take his personal decisions and risk,” the bank workers’ union said.

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