News Column

Our View: The days of bank union diktats are over

February 13, 2014



PERHAPS the banks had to hit rock-bottom before their boards found the courage to stand up to the employees' union ETYK that has been calling the shots in the industry for the last 30 years. Decisions taken this week by Hellenic Bank and Bank of Cyprus suggest that the days of union domination are finally coming to an end.

Hellenic Bank decided that it would stop offering its employees loans (housing, car, weddings) at preferential interest rates of below one per cent as was stipulated in the collective agreements. The union took the issue to the mediation service of the labour ministry, which ruled in favour of ETYK, on the grounds that the decision was in violation of collective agreements. However the bank ignored the ministry's ruling and unilaterally ended the privilege, pointing out that consolidation would be achieved by substantive action.

No Cypriot bank is in a financial position to give its employees loans with such ridiculously low interest, when it charges its customers seven and eight per cent. ETYK's members secured this privilege in the good times, when banks' top brass gave in to all the union's demands. But these are different times in which the banks cannot afford to be so wasteful and collective agreements are not written in stone, even though unions seem to think so.

An even more interesting move was that of the Bank of Cyprus which decided that it would no longer be bound by the collective agreements negotiated between ETYK and the association representing all banks. The BoC decided that it needed greater flexibility in dealing with labour issues. About time the ludicrous measure of collective bargaining, which imposed the same pay rises and benefits across industries, was challenged.

This practice benefited the union and the strongest businesses in an industry which would agree to top pay rises in order to put the weaker companies under pressure. Now the BoC is a weak bank it cannot allow its stronger rivals the Greek banks to agree to pay rises and benefits it cannot afford. A practice that is based on the absurd premise that a company with losses of billions should pay its staff the same pay rises as a company with profits of millions should have been stopped many years ago.

Negotiating with each bank separately, as would eventually happen, would significantly weaken the bullies of ETYK, who, a couple of weeks ago, suffered the embarrassment of having pay cuts imposed on their members at the Central Co-op Bank by ministerial decree. The union said it would go to court to challenge the decree, but the truth is that the days when the union was imposing its diktats and had bank bosses at its beck and call, are over. The bank bosses are finally revolting.

Send to Kindle


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Cyprus Mail


Story Tools