Employer and union in banking differ on amount of pay increase

The Finance Sector Federation (FEBASE) was mandated to negotiate employees’ wages in the banking sector in 2010 on the basis of a proposed 3% pay increase. The proposal was sent to the Negotiator Group of Credit Institutions in November 2009, which responded in December with a proposed 0.5% wage increase. FEBASE revised its proposal to 2.1% in January 2010, to 1.5% in March and to a final 1.3% in April; however, employers are now standing firm at 0.9%.

Evolving forms of collective bargaining in banking

Until the late 1990s, trade unions in the banking sector negotiated two national-level collective agreements:

  • a vertical agreement, the collective agreement of the banking sector (Acordo Colectivo de Trabalho (ACT) do sector bancário) with the employer body the Negotiator Group of Credit Institutions (Grupo Negociador das Instituições de Crédito, IC);
  • the ACT for the workers of mutual agricultural credit institutions in the cooperative sector with the National Federation of Mutual Agricultural Credit (Federação Nacional das Caixas de Crédito Agrícola Mútuo, FENACAM).

At the end of the 1990s, by virtue of developments in the sector and the emergence of large economic groups with specific characteristics, the trade unions of the banking sector – after listening to their constituencies – started a new form of collective bargaining. This new form of bargaining maintained the above agreements and gave rise to a set of new collective agreements for groups or companies in the banking sector:

  • at group level – the ACT of the Portuguese Commercial Bank (Banco Comercial Português, BCP) Group in 2001 and the ACT of the Caixa Geral de Depósitos (CGD) Group companies in 2003;
  • at company level – the company agreement (acuerdo empresarial, AE) of CGD and the AE of Cotacâmbios in 2003, followed by the AE of the Banco de Portugal and the AE of Banco Banif in 2008, the latter with a focus on social security issues.

The trade unions in the banking sector mandated the negotiator group of the Finance Sector Federation (Federação do Sector Financeiro, FEBASE) (PT0711039I) to conduct collective bargaining over the 2010 revision of the collective agreements, which was a step further in the coordination of collective bargaining in the banking sector. This coordinated strategy may be seen as a way of improving negotiations in the context of the current financial and economic crisis.

Initial wage increase proposals

In November 2009, FEBASE presented a proposal for a 3% pay increase in the banking sector for 2010, following the referential approved by the General Workers’ Union (União Geral de Trabalhadores, UGT) for collective bargaining. In December 2009, IC – which was in charge of the employers’ negotiations over the ACT for the banking sector – responded by proposing a 0.5% wage increase to the three banking trade unions within FEBASE: the Banking Trade Union of the South and Islands (Sindicato dos Bancários do Sul e Ilhas, SBSI), the Banking Trade Union of the Centre (Sindicato dos Bancários do Centro, SBC) and the Banking Trade Union of the North (Sindicato dos Bancários do Norte, SBN).

The Banif Group followed this position for the negotiations of its company agreement, while the BCP Group was in favour of differentiated increases – that is, a maximum increase of 0.5% for workers with lower wages and an increase of 0.25% for those with higher wages.

The employers argued on the basis of the poor national and international economic activity in 2009, and the expected evolution of the banking sector. IC presented a negative inflation forecast of -0.9% for 2010, contrasting with the positive inflation rate of 2.7% recorded in 2009. It declared this as an

‘evolution unprecedented in our recent economic history, resulting either from falling international prices of raw materials – in particular oil, a decrease of more than 40% – and also greater compression of companies’ profit margins, forced by the contraction of domestic demand’.

In addition, IC pointed out that falling consumer prices had resulted in a slight increase in disposable income in real terms and in the household savings rate in 2009, reinforcing the slight rise already observed in 2008.

Concessions made but no agreement

At a 20 January 2010 meeting with FEBASE, IC conceded that a 0.5% pay increase was insufficient, but explained that before deciding a higher rate it wanted to examine the 2010 state budget broad guidelines, particularly with regard to public investment policy and support to small and medium-sized enterprises (SMEs). At this point, it was clear that the banking private sector wanted to take into account the state budget guidelines on wage increases for the public sector. FEBASE argued on the basis of the data that was already available on banking business performance in 2009, which had improved compared with 2008, and emphasised that collective bargaining in the banking sector should not be conditioned by the state budget and public sector pay increases. A new round of negotiations was scheduled for 2 February, the date on which the new state budget would be disclosed.

However, the 2 February meeting was inconclusive. Once again, IC acknowledged that it might reconsider the proposed wage increase of 0.5%, while the trade union federation insisted on a revised proposal of 2.1%. FEBASE argued again in relation to the profits of the private banks, citing the examples of Banco Espirito Santo (BES) and the Portuguese Investment Bank (Banco Português de Investimento, BPI), whose profits had increased by 29.8% and 16.5% respectively in 2009. This was sufficient reason to have a pay increase in 2010 higher than the 1.5% increase observed in 2009, the finance sector federation argued.

A month later, on 2 March 2010, the employers presented a final proposal of a 0.7% wage increase with a view to closing the negotiations with FEBASE. In response, and also to close the negotiations, FEBASE proposed a 1.5% pay increase, equalling that of the previous year. The negotiations were then suspended; FEBASE and IC halted the talks on the revision of the wage scale, once they did not reach an agreement on the percentage increase. FEBASE declared that it was not in a position to accept a pay increase below 1.5%.

Talks restart but small gap remains

A second round of negotiations started on 19 March 2010. FEBASE reported that it was willing to change its proposal, provided that IC showed that it was prepared to negotiate an acceptable agreement; the trade union declared that ‘this attitude of good faith negotiation aims to avoid protest initiatives that will create instability in the sector’. On 13 April 2010, FEBASE and IC each made new proposals on a wage increase – 1.3% and 0.9% respectively. Although both parties reaffirmed their wish to terminate the process that has dragged on for several months, they still could not close the gap of 0.4 percentage points between the worker and employer representatives. FEBASE was explicit in the message: ‘a solution must be found quickly – either an agreement or a rupture, with consequences for the social stability of the sector’.

Maria da Paz Campos Lima, Dinâmia

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