Ireland: The representativeness of trade unions and employer associations in the banking sector
According to the Irish Bank Federation (IBF), employment in IBF member institutions and their subsidiaries stood at 40,507 in 2008, up from 35,658 in 2003. Employment by the major retail banks (AIB, Bank of Ireland, National Irish Bank, Permanent TSB, Ulster Bank and Bank of Scotland Ireland) was at 31,000. However, these figures may not be reflective of the entire banking sector as there is no official Irish data available on the whole sector. The sector has traditionally been covered by a system of nationally agreed private sector pay agreements which collapsed in 2009. Currently, bargaining remains at company level, albeit governed by a set of nationally agreed private sector pay protocols.
1. Sectoral properties
Economic background
According to the Irish Bank Federation (IBF) the banking sector is a major contributor to Ireland’s economic wealth. The sector provided €18.2 billion, or about 9.6%, of the gross value added/gross domestic product (GVA/GDP) to the Irish economy in 2007, according to the IBF. This was up from just €9 billion or 6.9% of GVA/GDP in 2002.
There is no official data available for the banking sector, but the employment figure for ‘Financial, insurance and real estate activities’ was 108,800 in 2008 (CSO QNHS – Central Statistics Office, Quarterly National Household Survey). There are no figures for these sectors prior to 2008 as the category was grouped as ‘Banking and other Business Services’ prior to this.
Employment in the banking sector accounts for nearly 2% of total employment in the economy and has stayed fairly constant over the past decade. Employment levels in the sector rose steadily from 2003 when employment was 35,658, up until 2007. However, the number employed in the sector dropped from 41,865 in 2007 to 40,507 in 2008 (the latest figure available).
The banking crisis was more severe in Ireland than elsewhere, due to the bursting of a national property ‘bubble’, which meant that Irish banks were already carrying high levels of bad debt when the global banking crisis hit in 2008. A 2010 report by international experts highlighted the role of Irish Government policies and bank governance/regulation failings in failing to prevent the bubble from developing.
A Government guarantee introduced in September 2008 and extended until the end of 2010 means that the state will guarantee all the debts and deposits of the six main Irish-owned financial institutions: AIB, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent (which owns Permanent TSB), EBS Building Society and Irish Nationwide.
Up to June 2010 – with the exception of a number of redundancies at Anglo Irish Bank – all of the major restructurings and redundancies in the sector were in banks which are not covered by the Government guarantee. These include Royal Bank of Scotland, Bank of Scotland Ireland ACC Bank. However, there is much speculation that with the guaranteed banks transferring their debts to the National Asset Management Agency (NAMA) they will enact restructuring plans in the near future which will lead to many more redundancies in the sector.
The unions in the sector are concerned to ensure that any redundancy programmes favour voluntary rather than compulsory redundancies.
Development of employment
| 2003 | 2008 | |
| Aggregate employment | 35,658 | 40,507 |
| Male employment | 0 | 0 |
| Female employment | 0 | 0 |
| Share of sectoral employment in % | 1.8 | 2 |
| Source of employment figures | IBF | |
| Comment | Irish Banking Federation data from 2010 | |
| 1998 | ||
| Aggregate employees | 35,658 | 40,507 |
| Male employees | 0 | 0 |
| Female employees | 0 | 0 |
| Share of sectoral employees in % | 2 | 2 |
2. The sector’s trade unions and employer associations
This section includes the following trade unions and employer associations:
(i) trade unions which are party to sector-related collective bargaining (In line with the conceptual remarks outlined in the background information included in the accompanying excel spreadsheet, we understand sector-related collective bargaining as any kind of collective bargaining within the sector, i.e. single-employer bargaining as well as multi-employer bargaining. For the definition of single- and multi-employer bargaining, see 4.2)
(ii) trade unions which are a member of the sector-related European Union Federation (i.e. UNI-Europa – Finance)
(iii) employer associations which are a party to sector-related collective bargaining
(iv) employer associations (business associations) which are a member of the sector-related European Employer/Business Federations (i.e. EBF – European Banking Federation, including EBF’s BCESA – Banking Committee for European Social Affairs; ESBG – European Savings Banks Group and EACB – European Association of Co-operative Banks)
2a Data on the trade unions
| Affiliation to multinational organisations | UNI Global Union – UNI Finance |
| Affiliation to national-level organisations | Irish Congress of Trade Unions (ICTU) |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | yes |
| Union's domain with regard to sector | overlap |
| Domain overlap with other unions in sector | no |
| Domain overlaps occur with the following unions in the sector | n.g. |
| 2009 | |
| ‘Active’ union members total (in employment) | n.g. |
| Union members (incl. non-employed), total | 15,052 |
| ‘Active’ union members in the sector (in employment) | n.g. |
| Union members in the sector, total (incl. non-employed) | 14,600 |
| Female membership as % of total members | 1 |
| Source of sectoral membership figures | Est. Social Partner |
| Union density – active members | n.g. |
| Sectoral density – active members | 37% |
| Sectoral domain density – active members | n.g. |
| Union density – total members | n.g. |
| Sectoral density – total members | n.g. |
| Sectoral domain density – total members | n.g. |
| Description of union's domain with regard to sector | IBOA is the leading union representing staff in Ireland's financial services sector. IBOA organises workers throughout the sector – full-time, part-time and temporary staff – in a range of institutions in the banking sector. IBOA represents a small minority of members outside the banking sector in the wider financial sector. |
| Representation of other groups than employees in the sector | IBOA represents temporary staff. |
| Affiliation to national-level organisations | ICTU |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | yes |
| Union's domain with regard to sector | sectional overlap |
| Domain overlap with other unions in sector | no |
| Domain overlaps occur with the following unions in the sector | n.g. |
| 2009 | |
| ‘Active’ union members total (in employment) | n.g. |
| Union members (incl. non-employed), total | 216,881 |
| ‘Active’ union members in the sector (in employment) | n.g. |
| Union members in the sector, total (incl. non-employed) | n.g. |
| Female membership as % of total members | 0 |
| Union density – active members | n.g. |
| Sectoral density – active members | n.g. |
| Sectoral domain density – active members | n.g. |
| Union density – total members | n.g. |
| Sectoral density – total members | n.g. |
| Sectoral domain density – total members | n.g. |
| Description of union's domain with regard to sector | SIPTU represents porters in bank branches |
| Representation of other groups than employees in the sector | n.g. |
| Affiliation to national-level organisations | ICTU |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | yes |
| Union's domain with regard to sector | sectional overlap |
| Domain overlap with other unions in sector | no |
| Domain overlaps occur with the following unions in the sector | n.g. |
| 2009 | |
| ‘Active’ union members total (in employment) | n.g. |
| Union members (incl. non-employed), total | 40,363 |
| ‘Active’ union members in the sector (in employment) | n.g. |
| Union members in the sector, total (incl. non-employed) | 3,500 |
| Female membership as % of total members | 0 |
| Source of sectoral membership figures | Est. Social Partner |
| Union density – active members | n.g. |
| Sectoral density – active members | 9% |
| Sectoral domain density – active members | n.g. |
| Union density – total members | n.g. |
| Sectoral density – total members | n.g. |
| Sectoral domain density – total members | n.g. |
| Description of union's domain with regard to sector | Unite represents workers in a number of banks including ACCBank, Bank of Scotland Ireland |
| Affiliation to multinational organisations | UNI Global Union |
| Affiliation to national-level organisations | ICTU |
| Engagement in sector-related collective bargaining | yes |
| Type of membership | voluntary |
| Consultation in sector-related matters | no |
| Union's domain with regard to sector | sectional overlap |
| Domain overlap with other unions in sector | no |
| Domain overlaps occur with the following unions in the sector | n.g. |
| ‘Active’ union members total (in employment) | n.g. |
| Union members (incl. non-employed), total | 45,206 |
| ‘Active’ union members in the sector (in employment) | n.g. |
| Union members in the sector, total (incl. non-employed) | 600 |
| Female membership as % of total members | 1 |
| Source of sectoral membership figures | Est. Social Partner |
| Union density – active members | n.g. |
| Sectoral density – active members | 2% |
| Sectoral domain density – active members | n.g. |
| Union density – total members | n.g. |
| Sectoral density – total members | n.g. |
| Sectoral domain density – total members | n.g. |
| Description of union's domain with regard to sector | Mandate represents retail bank staff at Permanent TSB |
2b Data on the employer associations
| Affiliation to national-level organisations | IBEC, Summit Finuas Network |
| Engagement in sector-related collective bargaining | yes |
| Consultation in sector-related matters | yes |
| Type of membership | voluntary |
| Organisation's domain with regard to sector | overlap |
| Domain overlap with other organisations in sector | yes |
| Domain overlaps occur with the following organisations | IBF |
| 2009 | |
| Number of member companies, total | 7,500 |
| Number of employees in member companies total | n.g. |
| Number of member companies in sector | 150 |
| Number of employees in member companies in sector | n.g. |
| Source of membership figures | Est. Social Partner |
| Description of organisation's domain with regard to sector | IBEC represents companies involved in every area of financial services from retail banks to fund administrators and managers and leasing and treasury companies. |
| Engagement in sector-related collective bargaining | no |
| Consultation in sector-related matters | yes |
| Type of membership | voluntary |
| Organisation's domain with regard to sector | congruence |
| Domain overlap with other organisations in sector | yes |
| Domain overlaps occur with the following organisations | IBEC |
| 2008 | |
| Number of member companies, total | 100 |
| Number of employees in member companies total | 40,000 |
| Number of member companies in sector | 100 |
| Number of employees in member companies in sector | 40,000 |
| Source of membership figures | Est. Social Partner |
3. Inter-associational relationships
3a Inter-union relationships
3a.1 Please list all trade unions covered by this study whose domains overlap.
Although trade unions sometimes represent workers in the same banking organisation, in essence the domains do not overlap as the unions represent different groups/grades of workers.
3a.2 Do rivalries and competition exist among the trade unions, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?
No rivalries exist between the unions in this sector as they are all members of the Irish Congress of Trade Unions (ICTU) and therefore are subject to strict rules and procedures regarding the representation of members. This is referred to as the ‘spheres of influence’ agreement which states that ‘Unions should not take members of another union into membership, save with the consent of their existing union, pending the outcome of any dispute procedures referred to Congress under paragraphs 45/46 of the constitution.’ All unions in the sector participate in collective bargaining at company level.
3a.3 If yes, are certain trade unions excluded from these rights?
3b Inter-employer association relationships
3b.1 Please list all employer associations covered by this study whose domains overlap.
The domains of IBEC and the IBF overlap, so many banking organisations would be members of both associations.
3b.2 Do rivalries and competition exist among the employer associations, concerning the right to conclude collective agreements and to be consulted in public policy formulation and implementation?
IBEC concludes collective agreements while IBF is a representative body rather than a body which engages in negotiations/collective bargaining.
3b.3 If yes, are certain employer associations excluded from these rights?
IBF
3b.4 Are there large companies or employer associations which refuse to recognise the trade unions and refuse to enter collective bargaining?
Most large companies in the sector would be members of IBEC and recognise trade unions.
A minority of banks including Anglo Irish Bank and Irish Nationwide did not recognise trade unions prior to the economic crisis. Following the nationalisation of Anglo Irish Bank the IBOA has attempted to organise workers there. Also in March 2010, Irish Nationwide concluded a formal recognition agreement with the IBOA. In the past the bank had strongly resisted granting trade union recognition.
4. The system of collective bargaining
4.1. Estimate the sector’s rate of collective bargaining coverage (i.e. the ratio of the number of employees covered by any kind of collective agreement to the total number of employees in the sector).
Up to 2009, during the period of national agreements, collective bargaining coverage was estimated to be 50–55% (estimate from national centre).
However, following IBEC’s withdrawal from the Social Partnership Agreements the Irish system is in a period of change and it is not possible to estimate the number of employees now covered by collective agreement.
4.2. Estimate the relative importance of multi-employer agreements and of single-employer agreements as a percentage of the total number of employees covered. (Multi-employer bargaining is defined as being conducted by an employer association on behalf of the employer side. In the case of single-employer bargaining, it is the company or its subunit(s) which is the party to the agreement. This includes the cases where two or more companies jointly negotiate an agreement.)
The nationally agreed social partnership pay agreements (multi-employer) covered all unionised employers in the private sector until IBEC withdrew in December 2009. Prior to 2009, it is estimated that 50–55% were covered by the multi-employer national agreements.
Since then a number of banks have renegotiated the terms of the national agreement at local level as a single-employer agreement (see 4.4).
Recently single-employer agreements have been important in the sector due to a large number of company restructurings. Furthermore, single-employer agreements have been used to agree the restructuring of a number of pension schemes for employees in the banking sector as the schemes are in deficit.
Therefore, at present it is very difficult to estimate the percentage of employees covered by single-employer agreements.
4.2.1. Is there a practice of extending multi-employer agreements to employers who are not affiliated to the signatory employer associations?
No
4.2.2. If there is a practice of extending collective agreements, is this practice pervasive or rather limited and exceptional?
There is no practice of extending collective agreements.
4.3. List all sector-related multi-employer wage agreements* valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered.
* Only wage agreements which are (re)negotiated on a reiterated basis.
| Bargaining parties | Purview of the sector-related multi-employer wage agreements | ||
|---|---|---|---|
| Sectoral | Type of employees | Territorial | |
| Government, IBEC and ICTU | Entire private sector in Ireland | All unionised private sector employees | Social partnership agreement Towards 2016 Social Partnership agreement Transitional Agreement* |
The Towards 2016 national pay agreement agreed in 2006 provided private sector pay increases as follows:
- 3% of basic pay for the first six months of the Agreement as it applies in each particular employment or industry;
- 2% of basic pay for the next nine months of the Agreement as it applies in each particular employment or industry – except for those employees on an hourly basic rate of €10.25 per hour or less on commencement of the second phase where a 2.5% increase will apply;
- 2.5% of basic pay for the next six months of the Agreement as it applies in each particular employment or industry; and
- 2.5% of basic pay for the next six months of the Agreement as it applies in each particular employment or industry.
The Transitional Agreement agreed in 2008 provided for private sector pay increases as follows:
- A pay pause of 3 months from the expiry of the last phase of the first module under Towards 2016;
- An increase of 3.5% for the next 6 months of the Transitional Agreement as it applies in each particular employment or industry; and
- An increase of 2.5% for the next 12 months of the Transitional Agreement – except for those employees on an hourly basic rate of €11 per hour or less on commencement of the second phase where a 3% increase will apply.
However IBEC formally walked away from the agreement in December 2009 and according to industrial relations specialist magazine IRN few private sector companies have implemented the terms of the agreement. Bank of Ireland paid the first phase 3.5% increase to 6,000 workers. However most banks have not paid the increases and a number of banks have renegotiated the terms of the pay agreement at local level (see below).
4.4. List the sector’s four most important collective agreements (single-employer or multi-employer agreements) valid in 2008 (or most recent data), including for each agreement information on the signatory parties and the purview of the agreement in terms of branches, types of employees and territory covered. Importance is measured in terms of employees covered.
| Bargaining parties | Purview of the agreements | ||
|---|---|---|---|
| Sectoral | Type of employees | Territorial | |
| Government, IBEC and ICTU | Entire private sector in Ireland | All unionised private sector employees | Social partnership agreement Towards 2016 Social Partnership agreement Transitional Agreement (See 4.3 for details) |
| Irish Life & Permanent (IL&P)* and Unite, Mandate, SIPTU | Single employer – IL&P | About 3,000 employees in IL&P | Agreement on pay increases, a freeze on increments, a pension review and a commitment to no compulsory redundancies until the end of 2010.* |
| Bank of Ireland and IBOA | Single employer – Bank of Ireland | All employees who are members of the Bank of Ireland Staff Pension Fund (about 6,000 employees) | Agreement on changes to the staff pension fund which aim to address a €1.25 million deficit in the pension fund. They include a temporary freeze on pensionable salary, a cap on pensionable salary and a post-retirement pension freeze for three years from retirement date. However, member contributions will remain unchanged at 2.5%. The changes to the pension scheme will also affect pension indexation for retired and deferred members from April 2012. With effect from April 1, 2012, ‘pension increases each year will be capped at the level of the annual percentage increase in the CPI to a maximum of 4% per annum’. |
| ACC Bank and SIPTU, Unite | Single employer – ACC Bank | All 650 employees in ACC Bank | Agreement on restructuring and redundancy terms involving 200 redundancies from a workforce of 650 and a reduction from 25 branches to 9. |
| National Irish Bank and IBOA | Single employer – National Irish Bank | All 640 employees in National Irish Bank | Agreement on restructuring and redundancy after the bank announced plans to plans to shed 150 jobs on a voluntary basis between February 2010 and July 2011, and to close 25 out of its 58 branches. In an earlier agreement on pay the Bank agreed to pay incremental pay increased for all eligible employees with effect from April 1, 2009 and to pay performance related pay with a focus on performance pay increases for pre-management staff with effect from April 1, 2009. |
| EBS and Unite | Single employer – EBS | About 600 employees in EBS | Agreement on a 6% pay increase between April 2009 and December 2010, increased employer and employee pension contributions and guarantees on industrial peace and job security up to December 2010. |
*The IL&P deal agreed in 2009 was a compromise agreement, as the unions had been seeking payment of the increases due under the national wage agreement (the Transitional Agreement), as well as payment of increments of about 3% due in 2009.
The pay increases agreed as part of the deal are ‘in lieu of incremental and performance related incremental increases and all other payments due during the period’ of the agreement. Workers got a pay increase of 2.5% with retrospection from August 1, 2009. A further 2.5% increase will be paid from August 1, 2010.
The increases are to be capped at a maximum of 2.5% of €55,000 or €1,375 for the grades – about 3,000 IL&P employees, mostly clerical and technical staff as well as junior management will be covered.
IL&P previously announced a cancellation of 2008 bonuses and a pay freeze for up to 160 senior managers and directors for 2009.
As part of the new agreement, increments will be frozen and no performance-related payments will be made for the 24-month period of the agreement. Increments and PRP payments will next fall due in January 2011.
The parties have also agreed that discussions aimed at restoring profit sharing arrangements ‘will take place before the end of 2010 having regard to the situation pertaining at that time’.
Crucially from a union point of view, the company has committed that there will be no compulsory redundancies up to 31 December 2010, for staff grades. Should any redundancies be required, they will be addressed by voluntary means.
5. Formulation and implementation of sector-specific public policies
5.1. Are the sector’s employer associations and trade unions usually consulted by the authorities in sector-specific matters? If yes, which associations?
Yes, all unions in the sector are members of ICTU and are consulted. IBEC and the IBF would also be consulted by the authorities in relation to the sector.
5.2. Do tripartite bodies dealing with sector-specific issues exist? If yes, please indicate their domain of activity (for instance, health and safety, equal opportunities, labour market, social security and pensions etc.), their origin (agreement/statutory) and the interest organisations having representatives in them:
No bipartite or tripartite bodies exist specifically for this sector.
However, the sector has a history of ad hoc tribunals which are held at company level to deal with disputes as they arise. This is a peculiarity of the sector and has occurred in AIB, Bank of Ireland and Ulster Bank.
6. Statutory regulations of representativeness
6a Statutory regulations of representativeness for trade unions
6a.1 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.
Yes, statutory regulations exist in Ireland establishing criteria for representativeness. Unions must have at least 1,000 members to act in a representative capacity and must register and apply for a negotiating licence from the Office of the Registrar of Friendly Societies.
6a.2 In the case of the trade unions, do statutory regulations exist which establish criteria of representativeness which a union must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.
As above, and, as a general rule, unions have to be affiliated to the Irish Congress of Trade Unions to be consulted in matters of public policy and to participate in tripartite bodies. As the umbrella body for Irish trade unions, the ICTU represents all affiliates at national level.
6a.3 Are elections for a certain representational body (e.g. works councils) established as criteria for trade union representativeness? If yes, please report the most recent electoral outcome for the sector.
No
6b Statutory regulations of representativeness for employer organisations
6b.1 In the case of the employers organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to conclude collective agreements? If yes, please briefly illustrate these rules and list the organisations which meet them.
In order to register, the grouping involved, which must consist of at least seven people, must draw up a set of rules governing the operation of the union. The rules, together with the prescribed application form and fee are submitted to the Registrar for examination and, once the rules are found to be in accordance with statute, it is registered.
6b.2 In the case of the employer’s organisations, do statutory regulations exist which establish criteria of representativeness which an organisation must meet, so as to be entitled to be consulted in matters of public policy and to participate in tripartite bodies? If yes, please briefly illustrate these rules and list the organisations which meet them.
In order to register, the grouping involved, which must consist of at least seven people, must draw up a set of rules governing the operation of the union. The rules, together with the prescribed application form and fee are submitted to the Registrar for examination and, once the rules are found to be in accordance with statute, it is registered.
6b.3 Are elections for a certain representational body established as criteria for the representativeness of employer associations? If yes, please report the most recent outcome for the sector.
IBEC is a statutory employer representative agency and as such is entitled to be consulted in matters of public policy and to participate in tripartite bodies.
7. Commentary
In general most of the large Banks in the sector are members of IBEC that recognise trade unions and engage in collective bargaining with trade unions. Interestingly, in March 2010, following the banking crisis and the Government guarantee, Irish Nationwide, a previously non-union bank signed a formal trade union recognition agreement with the IBOA and has committed to the principle of no compulsory redundancies. IBOA has 300 members out of a workforce of 400 at the bank. In the past, however, under former chief executive Michael Fingleton, Irish Nationwide had strongly resisted granting trade union recognition rights.
Following the banking crisis, many of the high-profile bank restructurings/redundancies have occurred with some level of collective bargaining or consultation with the trade unions at company/local level, including ACC Bank, Bank of Scotland, Ulster Bank, RBS and National Irish Bank.
Roisin Farrelly, IRN Publishing