Cyprus Mail
Our View

Our View: Giving in to Etyk is embarrassing for the banks

ETYK, the bank employees’ union that traditionally intimidates the bank bosses before bullying them into submission, called off a planned two-hour strike at Hellenic Bank on Thursday a few hours after informing employees of a work stoppage between 12.30 and 2.30pm, because of “racist” behaviour by management, with regard to the payment of the provident fund. It claimed Hellenic was discriminating against employees that joined the bank from the Cooperative Bank.

A few hours later, Etyk issued a new announcement informing staff that it was calling off the stoppage because it had met with Hellenic’s management that agreed to resolve the issue of the provident fund payments within the next week. There seems to be no dispute at banks that cannot be resolved with some good, old-fashioned blackmail by Etyk, which has successfully used the strike threat to impose its diktats on the banks for decades. All it has to do is make the threat and bank executives immediately back down.

The irony is that the banks, despite their recent woes, are the most financially powerful companies in Cyprus at which everyone wants a job because of the excellent pay and conditions as well as the job security they offer. Unions in such companies, normally would be powerless, because they have nothing to offer employees that the bank does not already generously provide. Yet because of the short-sightedness and cowardice of bank boards in the pre-crisis years, Etyk was given a say in promotions (it has to approve promotions and its criteria are never meritocratic) and allowed to impose the system of across the board pay increments, regardless of performance.

It is doubtful there is any developed country in the world in which a bank union enjoys such absurd powers. The big problem for the banks now, when profit margins are being squeezed, is that they cannot put an end to these arrangements that were agreed decades ago. The mere mention of reforming the pay system triggers strike threats which none of the bank executives seem prepared to face. The Bank of Cyprus had set as a target the reform of its pay system, wanting to link pay rises to performance as economic rationality commands, but has got nowhere, believing Etyk would surrender its power to dictate wages for the good of the banks.

The banks will never take back control of pay and promotions policy without an open confrontation with Etyk that would involve strikes and disruption. The fact that bank bosses believe they could achieve this end without disruption to their operations caused by strikes is incredibly naïve. If they are incapable of making contingency plans for a possible strike, they may as well carry on obeying Etyk’s diktats. Rejecting Etyk demands for a few days, before giving in, as Hellenic Bank did on Thursday, is an embarrassment for the bank bosses and a reminder of who is running the show.