Voluntary retirement scheme to cost Hellenic Bank estimated €85 million

The voluntary retirement scheme agreed with the bank employees’ union Etyk will cost Hellenic Bank an estimated €85 million and would lead to the departure of between 400 and 500 workers.

The agreement was a victory for Etyk which had been in dispute with management of the bank over the level of compensation. The union insisted that compensation should be in line with the formula used in the past, with the maximum pay-off at €200,000.

Hellenic Bank’s CEO Oliver Gatzke, who was suspended last month pending an investigation into comments he had made to staff about the bank’s share price, had insisted the level of compensation was excessive and there was deadlock for months.

He had tried to force matters by sending redundancy notices to some 300 workers earlier this year but this prompted an immediate reaction by the union, which called a 24-hour strike and authorised its executive council “to extend measures to the rest of the banks.”

The escalation of the dispute led to the intervention of Disy chief and presidential candidate Averof Neophytou who acted as a mediator and after separate meetings with each side secured a compromise.
The bank agreed to withdraw the redundancy notices, while the union called off the strike and agreed to return to negotiations for the renewal of the collective agreement, which had been deadlocked for seven months.

There has still been no breakthrough in the talks over the collective agreements with the union wanting across the board pay rises in the region of five per cent and Gatzke insisting these should be performance-linked.

With Gatzke suspended, it appears the bank’s board is inclined to end the confrontation of Etyk, by giving in to it. A Hellenic Bank insider said that the union’s pay-off demand for voluntary retirements would have been satisfied even if the CEO was in his post, because Etyk had the political system on its side.

“No party or politician was prepared to back the bank’s position over the pay-offs, just before presidential elections,” said a bank source.
Neophytou on Monday welcomed the agreement between Hellenic and Etyk as it ensured “fair compensation for hundreds of workers.”

The “maintenance of industrial peace as well as economic and banking stability, during this unsettled period for the country and Europe, is a priority,” he said in an announcement.
With elections on the horizon and Gatzke out of the picture, and unlikely to return to his post, it is very likely that Etyk’s main demand for the renewal of the collective agreement – across the board pay increases – will also be satisfied.

Gatzke’s future depends on what the Securities and Exchange Commission (SEC) decides regarding the allegations made against him. Hellenic Bank carried out an investigation of the allegations made against Gatzke during the bank’s AGM by the CEO of Demetra Holdings, a large shareholder in the bank, and submitted its report to the SEC which has still to decide if further action was necessary.