Disagreement over workforce reorganisation at newly merged BSCH bank

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Spanish trade unions have rejected a set of guarantees on employment proposed by the management of the newly-created Banco Santander Central Hispano (BSCH) at the start of 1999. There is now little chance of reaching an agreement on employment levels before the March 1999 merger of Banco Santander and Banco Central Hispano.

The imminent merger of Banco Santander and Banco Central Hispano was announced at the beginning of 1999. The new Banco Santander Central Hispano BSCH) will soon be 19th in the ranking of major banks in Europe, with assets of EUR 211,206 million. It will also be the largest bank in Spain, far above BBV, which was previously the largest with assets of EUR 118,444 million.

The merger received great publicity because of the size of the new bank and because of the discretion and speed with which it was agreed. The new BSCH has received a warm welcome from institutions and economic agencies that are predicting a new wave of partnerships and mergers in Spanish (and European) banking to deal with the new scenario presented by the euro single currency.

The initial reactions of the trade unions with representation in the Banco Santander and Banco Central Hispano were also positive. Furthermore, concern about redundancies seemed to have been allayed. The management of the new organisation made an explicit commitment shortly after announcing the merger that any staffing adjustments would be non-traumatic, thereby showing its willingness to agree a set of guarantees on employment with the unions before the merger was due to be put to the general meetings of the two banks in late March 1999.

However, the prospects of an agreement now seem far more remote. On 15 February, after several bargaining sessions, the management of the new bank made a proposal that the unions considered unacceptable. The main point of disagreement is that the proposed guarantees on employment cover only workers who belong strictly to Banco Santander and Banco Central Hispano. However, both are banking groups that have other organisations and commercial names, such as Banesto, which is linked to Banco Santander. The unions state that the exclusion of these workers is not negotiable. They also claim that the conditions offered to the rest of the workforce are excessively ambiguous, and that they fail to offer firm guarantees that there will be no redundancies and that any offer of early retirement or similar measures will be previously agreed with the unions. These are two points that the trade unions consider to be essential. All the unions with representation in the new bank (CC.OO, UGT, AMI; CGT, ELA, LAB and CIG) have issued an official statement expressing their rejection of the proposal from BSCH.