Deadlock in collective bargaining in financial services sector

Agreement has not yet been reached on the renewal of the collective agreement for the financial services sector, mainly due to disagreements over remuneration. The Luxembourg Bankers’ Association would like to abolish pay increases based on seniority. However, given the profits generated by the sector, the trade unions find this unacceptable. Meanwhile, the Luxembourg Association of Bank and Insurance Employees has realigned itself with the firm position taken by the other two trade unions involved.

Negotiations recommence

Although negotiations on the renewal of the collective agreement for the financial services sector had stalled since 16 January 2007 (LU0701029I), it was decided at a meeting between the trade unions on 15 March to respond positively to the invitation of the Luxembourg Bankers’ Association (Association des banques et banquiers Luxembourg, ABBL) to return to the negotiating table on a new basis. The negotiations had originally commenced in October 2006 (LU0702079I).

To the surprise of the two other trade unions involved – the Luxembourg Confederation of Independent Trade Unions (Onofhängege Gewerschaftsbond Lëtzebuerg, OGB-L) and the Luxembourg Confederation of Christian Trade Unions (Lëtzebuerger Chrëschtleche Gewerkschafts-Bond, LCGB) – the Luxembourg Association of Bank and Insurance Employees (Association Luxembourgeoise des Employés de Banque et Assurance, ALEBA) had signalled its consensus regarding the introduction of flexibility in the current system of guaranteed pay increases on the basis of seniority. ALEBA’s new position on this matter brought an end to the alliance between the trade unions: OGB-L and LCGB informed ALEBA that it no longer had any mandate to speak on behalf of the employees and would be acting in its own name and in defiance of the law, as the two other unions were the only ones with representative status at national level.

Trade unions reject remuneration system

However, at the end of May 2007, ALEBA, which boasts some 12,000 members, realigned itself with the firm position of OGB-L and LCGB. The trade unions reached the same conclusion that they were unwilling to accept the ABBL’s latest proposals. In particular, they regard the new remuneration system based on individual performance as damaging to employees’ acquired rights, to their prospects for salary growth, and in more general terms to harmonious labour relations within the sector. The trade unions insist that they do not wish to allow arbitrariness to be introduced to the salary systems. They believe that a system based on performance will lead to individualism and that it will be harmful to team spirit. Therefore, the trade unions are continuing to call for sufficient collective guarantees of pay progression.

According to the President of ALEBA, Marc Glesener: ‘For the financial sector, 2006 was an excellent year. The banks’ gross profits rose by 50%. But rather than responding appropriately to this economic achievement and the hard work of every employee on which it is based with proper remuneration, the employers are continuing to apply the budgetary thumbscrews.’ The workers’ representatives stress that they do not want to see a move towards the dismantling of social rights.

Dispute submitted to National Conciliation Office

As a result of the deadlock in negotiations, the dispute has now been submitted to the National Conciliation Service (Office National de Conciliation, ONC). At the same time, OGB-L has set up a website to enable workers to keep abreast of the negotiations.

Seniority payments to go ahead

On 2 July 2007, the labour tribunal also issued a decision on the trade unions’ request that employees should receive their seniority payments, on the grounds that the collective labour agreement remains in force until a new one is signed.

At the start of 2007, the ABBL had advised the management of the banks to stop applying this measure. However, the tribunal has upheld the trade unions’ position, which means that the payments will now have to be made by the employers.

Odette Wlodarski, Prevent