Banco Exterior agreement: final restructuring of the Spanish financial sector?

Download article in original language : ES9709221NES.DOC

In September 1997, the trade unions accepted the plan of the Banco Exterior de España, which involves the elimination of a third of the workforce (2,100 employees) over the next three years. This agreement seems to mark the end of the restructuring of the Spanish financial sector which has led to the loss of 30,000 jobs since the mid-1980s.

In May 1997, Banco Exterior de España (BEX), one of the banks that comprise Argentaria (the public financial organisation), published a draft proposal regarding its future, the central point of which was the reduction of the workforce by one third, or 2,100 jobs. Workers over 53 years of age would be retired on 78% of their salary through 1,500 early retirements, and the remaining 600 workers would accept voluntary redundancy. The bank also wished to harmonise its collective agreement with that of the private banking sector, which would involve a reduction in pay scales; the difference would be converted into personal pay supplements according to results, multiskilling, flexibility in working hours and geographical mobility - which it proposed to widen to a radius of 250 kilometres. All of this was aimed at ensuring the survival of the organisation, which suffers from an excess workforce and high salary costs.

This initial position of BEX met the categorical opposition of all the union confederations represented in the bank (CC.OO, UGT, CGT, USO and Atexbank), which considered it a "covert redundancy procedure" (CGT) and an "absolute provocation" (CC.OO), given the mandatory character of the early retirements. They unanimously called for its withdrawal. María Jesús Paredes, the leader of CC.OO, the majority union in the bank, was very critical about the management of Argentaria. She stated that the problem of the bank was not the surplus workforce but the lack of business and bad administration, which had led BEX to have far lower financial margins and income from services than its competitors, which nevertheless employed far more workers. She also claimed that the bank had not attempted to reach a policy of consensus, as had been done in other financial institutions. With respect to the modifications of the existing collective agreement, she was prepared to accept pay cuts, but not geographical mobility.

Finally, after three months of negotiations, CC.OO, UGT, USO and representatives of Argentaria signed a draft agreement in July 1997, which was converted into a full agreement in September. The unions have accepted: early retirement for workers over 53 years of age on 85% of pay until the age of 60, when they will be guaranteed 90%; voluntary redundancy at 51 years of age on 70% of pay until the age of 53; the establishment of new pay scales; and geographical mobility within a radius of 25 kilometres.

With this pact, the unions assume that the workforce adjustment process in the Spanish banking sector is now over - they believe that is has been caused by bad administration and the lack of competitiveness. "Now", states Ms Paredes, "we must transform unpaid working hours into jobs."

Cost reductions in the Spanish banking sector have been carried out fundamentally through a reduction in employment that has involved the loss of 30,000 jobs over 10 years. It seems that the BEX agreement marks the end of the restructuring of this sector, which has been largely agreed with the unions on the basis of drastic early retirement plans, accompanied by the acceptance of lower wages and worse working conditions for newly recruited workers - younger staff with a higher level of education who are more willing to accept the employers' requirements for flexibility, multiskilling and continuing training in exchange for fewer benefits.