Bank of Scotland Ireland – part of Lloyds Banking Group, in which the British Treasury holds a 77% stake – has reached agreement with the Unite trade union over the transfer of 800 workers to independent service company Certus, as part of the Bank’s wind down. They will receive a basic wage rise worth 2.5%, a ‘retention’ bonus worth up to 50% of salary, enhanced severance terms and a commitment to no compulsory redundancies until 2013. Pension arrangements have also been revised.
Bank of Scotland Ireland (BOSI) announced in August 2010 that it would be winding down its remaining operations in Ireland and some 800 employees would be transferred to an independent service company. Earlier in 2010, 750 workers were made redundant from the bank due to a combination of the closure of Halifax retail outlets across Ireland and job losses at the BOSI customer service centre in Dundalk as well as at the associated services and asset finance division at the bank’s Dublin headquarters.
Certus, which was established by senior Irish management at BOSI, is to take over the management of the bank’s €32 billion loan book following the wind down. It is planned that former BOSI offices will be rebranded under the Certus brand in early 2011. Certus will hold the Lloyd’s BOSI contract for five to seven years. It is also hoping to gain contracts to service the loan books of other banks as well as with the National Asset Management Agency (NAMA).
According to the transfer agreement between BOSI, Certus and the Unite trade union, the terms are subject to the Cross Border Merger being approved by the courts and will be enshrined in a legally binding document signed by BOSI, Certus and Unite. The agreement will also be registered with the Labour Court.
Pay and bonus
Workers transferring to Certus will receive a base-level pay increase of 2.5% with effect from 1 May 2011. They will also be eligible to participate in a retention bonus scheme. A bonus of 50% of salary as at 31 December 2010 ‘will be paid if a colleague achieves or meets a higher performance standard in the mid-year and end-of-year performance reviews during 2011 and 2012’, the agreement says. The retention bonus will be paid in four equal instalments between August 2011 and February 2013. Funding for these payments will be provided by BOS Plc.
Redundancy
Certus has given a guarantee of no compulsory redundancies for a two-year period up to 31 December 2012. In the event of any voluntary redundancies during this period, redundancy terms of 7.25 weeks’ pay per year of service, inclusive of statutory entitlement, will apply. Statutory redundancy entitlement is two weeks’ pay per year of service up to a maximum of €600 per week, plus one extra week’s pay.
Redundancy terms for workers made redundant from 1 January 2013 will be eight weeks’ pay per year of service, inclusive of statutory entitlement. These terms will also apply during 2011 and 2012 if Certus invites applications for voluntary redundancy in excess of 10% of the headcount (cumulative over the two-year period).
Both packages are subject to a minimum payment of 26 weeks’ pay and a maximum payment of 143 weeks’ pay. A retraining grant of €3,000 per year of service up to a maximum of four years’ service will also apply.
According to the agreement, should a former BOSI employee continue to be employed by Certus, ‘following Certus taking on a new client’, and be subsequently made redundant, ‘their redundancy relative to the period of time that they have worked on the BOS book (including previous service with BOSI)’ will be made on the agreed redundancy terms.
Pension arrangements
With regard to future pension arrangements, former members of the BOSI staff benefits scheme (defined benefit) will be required to participate in a defined contribution (DC) pension scheme. In the DC scheme, workers may contribute between 5% and 8% and the employer will contribute three times the employee contribution. Former members of the DC and hybrid (or mixed) schemes will be invited to participate in a DC pension scheme. Workers may contribute between 3% and 5% and the employer will contribute twice the employee contribution.
Roisin Farrelly, IRN Publishing