ONLY in our union-dominated country was it possible for a union to call a strike because it wanted the employer to spend less money on annual pay rises. Yet this was the reason for the 24-hour strike staged at Hellenic Bank on Friday by the bank employees’ union Etyk, which has dug in its heels and has been refusing to sit at negotiations with management for months now.
The dispute is over which side will decide how the annual pay rises will be distributed, with the bank wanting to introduce a system that will reward employees for their performance and the union defending the unmeritocratic principle of the same pay-rise for all, stipulated in collective agreements. Etyk has demanded a 3.5 per cent pay rise for all Hellenic’s employees while the bank has offered 2 per cent for everyone plus an additional 2.4 per cent of its annual payroll cost to be distributed to employees according to their performance evaluation and the market standard for their position.
In addition to this, the bank board has also set a minimum for gross monthly salary of €1,300 which would significantly benefit some 250 staff that joined from the Co-op Bank on wages that were markedly lower than this. The total sum of the pay rises Hellenic proposed would be in the region of €4.7 million, one million euro more than the cost of Etyk’s demands. Etyk, however, remains stuck to antiquated practices of 50 or 60 years ago that primarily applied to the factory floor, all blue-collar workers receiving the same pay rise. It does not recognise that the world has moved on since then and no rationally-run business, employing skilled, qualified staff, uses such a reward system.
It is a system that disincentivises labour as it rewards the indolent and mediocre by the same amount it rewards those that excel at their job, taking responsibility and producing positive results for the bank. There is no more surefire method of demotivating good staff than uniform pay rises, imposed by a union whose primary objective is to protect the mediocre and unproductive. This is why Etyk, like the civil servants’ union Pasydy, have zealously defended seniority as the main criterion for promotion. It allows the mediocre, sometimes the plain incompetent, to gain promotion at the expense of much abler colleagues. Pasydy has even ensured there is no reliable staff evaluation system so that job performance is not a criterion for promotion.
While this irrational reward/promotion system is understandable in a monolithic, backward organisation like the civil service, its existence in public companies operating in an open market is indefensible and the boards of the banks are solely to blame for allowing it to survive for so long. In effect, they not only surrendered the right to decide the pay rises of their staff to Etyk, but they made the union and its leadership appear all-powerful, which to large extent it was, in the eyes of their employees. Apart from making blanket pay rises the norm, the cowardly bank boards also gave Etyk a major say in staff promotions and picked up the bill for medical insurance which the union was offering all its members.
Hellenic, to its credit, has decided to take stand and end this irrational regime that leaves the bank at the mercy power-mad union bullies. It prepared a new pay system that would reward good job performance and in February invited Etyk to discuss it. The union has flatly refused to do so because a performance-based reward system would loosen its hold over employees, which gives it its power and enabled it to dictate its terms to the banks, like a victor of war, for decades. Bank boards obligingly behaved like the vanquished, surrendering their authority to the bullies of Etyk, who are now resorting to strikes to preserve their power.
Nobody surrenders his power without a fight, which is why Etyk will do everything it can to defeat the bank’s decision to introduce a fair reward system, including using intimidation tactics to force its members to strike. Only in Cyprus, under its toxic union rule would banks in 2019 still be prevented from deciding their pay structure. A moral question is also raised by this irrational regime – on what moral grounds and with what legitimacy can a union that has invested nothing in the bank, dictate to companies and individuals that have invested tens of millions of euro in it, how they should manage their investment? Surely those taking the business risk should be deciding how the bank should be organised and run.