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  1. 1. INE - OTOE Labour Institute OTOE Athens 2009 DialogoS+ DialogoS+ Evaluation of international experience on social dialogue in respect with changes ensuing the new economy in the banking sector and transfer of best practices to new member countries Funded by: EUROPEAN COMMISSION Employment, Social Affairs and Equal Opportunities DG, Adaptability, Social Dialogue and Social Rights, Social dialogue, Industrial relations, Adaptation to change BUDGET HEADING 04.03.03.01, VP/2007/001/894 1 ISBN 978-960-8428-02-7
  2. 2. Εuropean Project DialogoS+ Evaluation of international experience on social dialogue in respect with changes ensuing the new economy in the banking sector and transfer of best practices to new member countries ISBN 978-960-8428-02-7 Αthens 2009 © INE - OTOE 9 Vissarionos, 106 72, Αthens 2
  3. 3. Index Introduction 5 1. Best Practices for Social Dialogue in the Banking Sector and New Challenges 7 Summary 8 National Best Practices and Challenges 10 Denmark 10 Spain 14 Ιtaly 18 Greece 24 Portugal 28 Μalta 31 Cyprus 36 Βulgaria 39 Romania 42 Conclusion 45 2. Design, Implementation and Analysis of the Forecasting Exercise 47 Executive Summary 48 Introduction 49 Overall Aims of the DialogoS+ Project 49 Scope and Motivation of this Report 51 Banking Sector State-of-the-Art: the Crisis and the Challenges 52 Roadmapping: Definitions and DialogoS+ Methodology 54 Introduction to Roadmapping 54 Roadmapping Methodology for DialogoS+ 59 Roadmap Thematic Areas 63 Working Life in the Banking Sector 63 Foreign Ownership, Mergers and Acquisitions 64 Public Support and Industrial Actions 66 Union Density Rates 68 Collective Bargaining and Union Impact at Negotiation Levels 70 European Union Dialogue and Convergence 71 Concluding Remarks and Next Steps 73 References 74 3
  4. 4. Εuropean Project DialogoS+ DialogoS+ Project Partners Project Coordinator: INE - OTOE (Labour Institute OTOE) Partners: OTOE (Hellenic Federation of Bank Employee Unions) FABI (Independent Federation of Italian Bank Workers) - Ιtaly Federacion de Servicios de UGT (FeS-UGT) - Spain Sindicato Dos Bancarios do Centro Direccao - Portugal ΕΤΥΚ (Cyprus Union of Bank Employees) Malta Union of Bank Employees - Μalta FSAB (TUFIB) - Romania Trade Union of the Bank Employees and Workers in UBB - Bulgaria Finance Sector Union of Denmark - Denmark Vocational Training Centre DIASTASI - Greece SEV (Hellenic Federations of Enterprises) - Greece Brunel University - United Kingdom Εdited by: Αristoteles Lakkas Panagiotis Panagiotopoulos Ιoanna Theochari The views expressed and the information contained in this publication does not necessarily reflect the position or opinion of the European Commission, or the position or opinion of the national partners of the project. The views expressed are the authors’ views. 4
  5. 5. Introduction Introduction Social Dialogue is considered a driving force for economic and social reform, a key to better governance of the now enlarged European Union and a vital element of the European Social Model. This report examines the best practices of social dialogue in nine EU member states’ banking sector, aiming at developing a comparative perspective. It draws on extensive participatory training developed by the DialogoS+ project partners just before the eruption of the global financial crisis. These social dialogue experiences become more valuable under the new conditions of the ongoing financial crisis which also affect employment relations in the banking sectors. On behalf of INE/OTOE, we would like to thank all participant trade unions and their representatives for their active and productive way in shaping the development of the DialogoS+ project that helps to identify social dialogue best practices in the banking sectors at national level and highlight how they can help us in meeting the new challenges. Stavros Κoukos Αristoteles Lakkas President OTOE Managing Director ΙΝΕ - ΟΤΟΕ President INE - OTOE 5
  6. 6. Εuropean Project DialogoS+ 6
  7. 7. 1. Best Practices for Social Dialogue in the Banking Sector and New Challenges Dr Christos Α. Ιoannou Report for INE - OTOE prepared for the project DialogoS+ 7
  8. 8. Εuropean Project DialogoS+ Summary By analysing recent developments in ‘national’ banking sector systems from a comparative perspective with regard to social dialogue practices we have drawn interesting conclusions concerning the different degrees and the different stages of social dialogue in regulating banking sector employment relations in nine EU member states. This analysis and the comparison of different national systems of employment regulation in banking sectors, are based on contributions provided by the • Federazione Autonoma Bancari Italiani (FABI), • Federacion de Servicios de UGT (FeS-UGT) Spain, • Sindicato Dos Bancarios do Centro, (SBC) Portugal, • Cyprus Union of Bank Employees (ETYK), • Malta Union of Bank Employees ( MUBE ), • Trade Union of the Bank Employees and Workers in UBB AD, Bulgaria, • Federatia Sindicatelor din Asigurari si Banci, România • Finansforbundet, Finance Sector Union, Denmark, • Greek Federation of Bank Employee Unions ( OTOE), lead us to classify them, for analytical reasons, in four groups. The first group of ‘Best Practices’ refers to three ‘old’ member states namely Denmark, Spain, and Italy. Their common characteristic is the relatively strong role of collective bargaining in shaping effective social dialogue in the banking sector. In Spain we consider as best practice the regulation of M&As implications through collective agreements that produced results embodied in the case of early retirement law for bank employees made redundant in the banking sector restructuring process. In Italy we consider as best practice the regulation of banking restructuring implications through collective agreements that were regulated through the innovative and collectively agreed and operated ‘income support fund’. In Denmark we consider as best practice the joint regulation of banks and insurance sectors and the strong influence of social dialogue in shaping the ‘flexicurity’ solutions in the banking sector. The second group of national experiences refers to social dialogue challenges rather than to ‘Best Practices’, in the sense that the pre-existing pathway of developing social dialogue is challenged. These challenges emerged in the case of two ‘old’ member states, namely Portugal and Greece, were their common theme is the emerging challenge to sectoral collective bargaining as a mean for effective social dialogue. 8
  9. 9. The third group of national experiences refers to best practices of social dialogue that emerged in two ‘new’ member states, namely Cyprus and Malta, where the influence of the national unions acting in the banking sector enhanced social dialogue as a means for regulating employment relations and more specifically in dealing with “new comers” in the sector (through Mergers & Acquisitions) by maintaining union membership and effective role for social dialogue. The fourth group of national experiences refers to challenges faced by developing national unions in two ‘new’ member states, namely Bulgaria and Romania, were their common theme refers to the challenge of building social dialogue capacity through increasing membership and establishing sectoral collective agreements. 9
  10. 10. Εuropean Project DialogoS+ National Best Practices and Challenges Denmark The key topic for Denmark is the strong role of collective bargaining. Therefore it appears a common theme between Spain, Italy and Denmark with regard to the strong role of collective bargaining 1. Major changes in the Banking Sector Employment Relations. Employment dropped slightly from 2002 to 2004. Since 2004 there has been a rather significant rise until 2007. No statistical data are yet available for 2008. Banks and Mortgage credit Insurance Total savings banks institutions companies 2002 41.613 4.174 16.972 62.759 2003 40.950 4.268 16.780 61.998 2004 40.833 4.040 16.713 61.585 2005 41.364 4.081 17.709 63.154 2006 43.270 4.151 18.155 65.575 2007 44.284 4.088 18.617 66.989 Looking at the above mentioned factors, most of the M & A activities have been between fairly small financial institutions with rather low impact on employment level. The development of e.g. technology has not been characterised by sudden shocks. Looking at the cross border level, Nordea Bank has changed its structure at the Nordic level and Danske Bank has acquired foreign banks, most notably Northern Irish. The chart below shows the unemployment rate for the members of Finansforbundet. As explained above, during the period in question this also illustrates a slight rise and a significant drop in unemployment. This also shows that since 1992 unemployment in the sector has not been lower than in 2008. 10
  11. 11. Best Practices for Social Dialogue in the Banking Sector and New Challenges Kilde: FTF-A (02/04-2008) (Explanation: “Kvinder” = Women, “Mænd” = Men, “I alt” = Total). As far as prospects for the future are concerned, however, it was generally assumed, before the coming of the financial crisis that the economy in the sector will slow somewhat down in the coming years. Even though the international subprime crisis has not hit the Danish financial sector as hard as the case is in many other countries, the financial turmoil has taken its toll. At the end of the day, this could lead to a rise in unemployment. 2. Ways of Regulation of the Banking Sector Changes. All in all, a majority of the Danish banking sector structure is regulated through collective agreements, which are being adjusted from time to time in connection with the collective bargaining process. There has been regulation through a combination of measures, including bargaining, information and consultation. Some of the EU legislation has been implemented through general legislation and some more specific sectoral issues through agreements. 11
  12. 12. Εuropean Project DialogoS+ 3. The Importance of Collective Bargaining. Social dialogue is primarily evolving through collective bargaining agreements. These are rather detailed and give a solid foundation for thorough debating between employer and employee representatives. Legislation has been used to a smaller extent, but this is mainly in the area of working environment where the rules on dialogue between employer and employees are laid down in the Working Environment Act. Also, the rules on employee representation on the boards of companies are contained in the Act on Public Limited Companies. 4. The Role and Influence of Sectoral Trade Unions. The role and influence of Sectoral Trade Unions is strong. The work councils play a central part and also the employee representatives on the company board. Also both central and decentralised trade union officers have been engaged in the work. Finansforbundet have developed specific procedures for e.g. merger situations, including a manual for transnational mergers which has been translated into English and can be used as a ‘guideline’ by other national unions. 5. The most important Challenges. Finansforbundet considers that Mergers & Acquisitions may be a large challenge in the future, especially at the cross border level. Outsourcing of e.g. IT is another important challenge. These two issues were the main concerns before the global financial crisis. 6. The preferred role for Social dialogue. Finansforbundet consider that there are many aspects concerning the preferred role for Social dialogue. A few could be 1) to optimise the influence of employee representatives through relevant education and 2) improving and optimising the existing regulatory framework. 7. The areas where Social Dialogue may play a role. Finansforbundet consider that all aspects of modern employment relations are areas of interest. It is not possible to generalise and pinpoint one or more specific topics as “winners”. Therefore Social Dialogue, in the ‘mature’ Danish context is considered as the main tool for regulation. 12
  13. 13. Best Practices for Social Dialogue in the Banking Sector and New Challenges 8. Barriers to Social Dialogue. Finansforbundet consider that there are no real barriers to social dialogue. In general, the biggest challenge is to keep modernising the framework of social dialogue to keep up with the developments in an ever changing world of finance. That was the Finansforbundet suggestion just before the eruption of the global financial crisis. 9. Future trends in Restructuring and New Challenges. Finansforbundet considered that during the latest five years (2003-2008) there have been mostly relatively small adjustments in the Danish banking sector and that explains that there had been very little public debate in recent years. But a rise in Mergers & Acquisitions activities and further the implications of the global financial crisis would call for more active union role in the public debate. 13
  14. 14. Εuropean Project DialogoS+ Spain The key topic for Spain is the strong role of collective bargaining. As best practice we identified the regulation of the implications of Mergers & Acquisitions through collective agreements with special reference in the case of the “early retirement law”. It is part of the common theme between Spain, Italy and Denmark which refers to the strong role of collective bargaining. 1. Major changes in the Banking Sector Employment Relations. In Spain there has been wide experience about changes in the banking sector due to Mergers, Acquisitions and privatizations. Changes due to new technologies applications have had a less important influence. On workforce changes for the union UGT it is clear that Mergers & Acquisitions have the main purpose of reducing costs by reducing personnel. In Spain, this resulted in employment cuts from 121.500 banking employees in the year 2000 to 110.500 in 2008. The process of concentration resulted in a structure of 147 different bank firms (75 National and 72 international) and 6 bank groups, Santander, BBVA, Popular, Sabadell, Barclays and Deutsche Bank. This phenomenon has not ended, and the recent trend has been branch outsourcing like a franchise. The major challenges through mergers in Spain have been: • In 1999 when Santander merged and absorbed progressively BCH under the new name SCH. This resulted in employment cuts from 31.000 employees in 1999 to 21.000 in 2007 (without counting the broader group). • In 2000 BV merged and absorbed Argentaria (Former public banks holding) under the new name BBVA. This resulted to employment cuts, from 37.000 employees in 2000 to 31.000 in 2007. Further in Santander, there has been an expectation of 1.000 early retirements for 2008 and a further 2000 in BBVA. In Spain and by agreement with major unions UGT and CCOO, the job losses in the workforce are regulated by means of early retirements, with a percentage salary that runs from 83% gross income, and 52 years age in BBVA, and 90% and 50 years age in Santander. 14
  15. 15. Best Practices for Social Dialogue in the Banking Sector and New Challenges 2. Ways of Regulation of the Banking Sector Changes. In Spain all changes have been agreed between banks and unions, mainly with UGT and CCOO unions, which represent 78% of membership in the sector. In Spain the repre- sentation and bargaining rights are provided by the “Estatuto de los trabajadores” (general labour law) and is supplemented by the National Collective Banking Sector Agreement. Separate agreements can be signed at bank level. In the same line, the Spanish Ministry of Employment respects social dialogue by not interfering in the negotiations. Apart from collective bargaining, the other main type of social dialogue which took place in these major developments with Spanish trade unions was information and consultation procedures. 3. The Importance of Collective Bargaining. In the Spanish banking sector the main tool for employment relation’s regulation remains collective bargaining. In addition to EU and national labour laws that apply in Spain and enhance social dialogue procedures, all restructuring processes and loss of jobs, are mainly treated in the frame of NCBSA (Sectoral collective agreement). Also, national experience suggests that banks prefer to deal with their social partner, the trade unions. The Patronal employers association and the confederations of UGT and CCOO sign the national employ- ment agreement, ANC, in the many last years. This agreement regulates labour market aspects and salary increase along with working life issues and is binding for all their affiliates. 4. The Role and Influence of Sectoral Trade Unions. In the Spanish banking sector, the type of representative bodies and organs though which the social dialogue processes are evolving, normally are the Federations represented by the national sector federal secretary (it is noteworthy that in the period of the project a woman colleague Mrs. Torronteras). On the other side of the bargaining table there is the employers association, AEB, in representation of the banks. Also, at the company level operate the European Works Councils. At the national level there is a sector secretariat depending on the FeS-UGT with a national sector secretary that deals “monitoring” the banking sector industrial relations. 5. The most important Challenges. As the most important challenges in the future development of the banking sector in Spain is considered the unionisation growth. This is related to the current trend of outsourcing the traditional work of bank employees that is transferred to service companies (which are 100% bank subsidiaries) with relatively worse employment conditions for workers and no union rights recognized. In that sense of special significance is the case of Santander, 15
  16. 16. Εuropean Project DialogoS+ with a holding of externalized companies (such as Sercoban, Produban, Gesban, Geoban, Inverban) that also receive work from subsidiaries, while office branches “suffer” a lack of personnel, and while central departments are ‘emptied’. Even payroll and part of HR is outsourced. For the Spanish unions, the employment level is also a major challenge, which is subject to pressure by the bank’s total orientation to short term business targets, bad work organization and the future concerns of new M & As. Spanish unions in BBVA “fear” about administrative jobs to disappear, along with central departments. 6. The preferred role for Social dialogue. Spanish unions consider the social dialogue process itself a main objective. In this context, they feel confident in the way the sector is reacting to changes, with the main role of collective bargaining, and through the dialogue with the employers association AEB. They consider also that according to the information and consultation rights amplification of article 64 of the E.T (worker’s statute) they could have better opportunities. The aim for the Spanish unions is to strengthen the level of social dialogue at the company level and get their fellow workers to realise the benefits and importance of social dialogue as a mean to find solutions. 7. The areas where Social Dialogue may play a role. Spanish unions would like to see more effective influence of social dialogue in policy areas like gender equality agreements in the banks. This trend is developing in the sector, and they plan to have agreements in all banks, including professional career and gender “floors” i.e. breaking the glass ceiling in women’s career development. In training also, social dialogue has a role with the creation and operation of joint observatories and commissions between bank’s H.R and unions. Life long learning and work-life balance agreements are also signed at company level. There is an increasing need for awareness in order to disseminate the contents and use of these new rights. Also inside themselves the unions prepare their representatives about the day to day incidence and monitoring in these new policy areas. The banking sector in Spain is self-regulating the flow of employment needed. What is a real new trend is the substitution of older employees by young. The side effects of this is whether they are more unionised, they have higher salaries, and that the experience in not considered anymore an advantage, but the knowledge of new techniques of sales and marketing. HR functions change. Commercial departments are selecting people, instead of former HR departments. More and more companies apply overtime, which older employees refuse to do. Another future trend to be considered is the increasing telemarketing work that operates outside the departments and branches. 16
  17. 17. Best Practices for Social Dialogue in the Banking Sector and New Challenges 8. Barriers to Social Dialogue. Spanish trade unions do not consider that there are real barriers to social dialogue in the banking sector. This is attributed to the significance of existing regulations and to the fact that restructuring is also regulated by the law, and therefore employers have to take into account the approval of the unions, and of the Labour Ministry. Nevertheless, this does not imply the lack of possibilities that banks in their effort to reduce operating costs may adopt more aggressive initiatives. 9. Future trends in Restructuring and New Challenges. In Spain, the unions (UGT) consider that there is a perception, still, in the general public that bank employees are some kind of privileged employees. They also consider that the media create for banks and employees not a good image, by criticising the commissions charged and the relevant costs. UGT consider that the employers Association (AEB) prefers that the possible problems should be treated internally, without publicity. UGT considers they contribute very hard to the social “well-being”. According to the UGT research cabinet, conflict creates a bad impact in members and workforce in general. UGT feel confident that the new provision on consultation rights in the ET article 64 revision would help dialogue. Companies and work councils have to implement these rights, and have a permanent social dialogue with unions and other stakeholders (shareholders, public). UGT considers that past and future trend in this case and for the banking sector is always the same: companies try to avoid or minimize information and unions try to maximize consultation. Union reps need to be prepared and taught in new technologies and communication abilities, otherwise that field should be occupied by banks, creating their “techno-virtual union” with webs, online counselling, and service agency providers. UGT highlighted that in Scamander, as a matter of fact, there is a free toll line to count “your personal life problems” that refrain employees from performing well! 17
  18. 18. Εuropean Project DialogoS+ Italy The key topic for Italy is the strong role of collective bargaining. As best practice we identified the regulation of banking restructuring implications through collective agree- ments with innovative and collectively agreed tools and among them the “income support fund”. In this sense, it is part of the common theme between Spain, Italy and Denmark which refers to the strong role of collective bargaining. 1. Major changes in the Banking Sector Employment Relations. The present structure of the Italian banking system is the result of a transformation process that started in the beginning of the 1990s. As milestones in this process can be considered the 1997 profitability reduction crisis that was caused by margin of interest crisis and resulted to plans for 30.000 banking employees considered as potentially to be outsourced. To understand the importance of privatisations in the credit sector we have to consider that 1992 the share owned by the state and the institutions almost reached 75%. Between 1993 and 2002 in the Italian banking sector there have been more than 500 mergers that involved nearly half of the banking sector and lead the state share to less than 10%. The transformation of the Italian banking system has had implications in the employment trend which has evolved as follows: 1999: 350.000, 2002: 340.500, 2003: 338.300, 2004: 337.000, 2005: 340.865 employees, of which 299.000 in banks and service companies owned by a banking group, 24.000 financial companies, and 18.000 in independent service companies. 2. Ways of Regulation of the Banking Sector Changes. The transformation process of the Italian banking system has been mainly regulated through collective bargaining and social dialogue. In 1997-1998 there was a Social Agreement between the Italian Government, the Italian Banking Association (ABI) and 9 bank unions. In 1999-2001 followed the agreement for early retirement (5 years) as a way of cutting staff costs. In the same rationale, a National Contract introduced incentive schemes financed by the reduction of overtime work. In 2001-2005, a new relationship was formed in the Italian banking system. In 2006, the exchange of ideas instead of simple information on incentives improved social dialogue and outcomes. In 2007, national negotiations started with ABI for the renewal of the National Collective Agreement. One of the important outcomes of the regulation of changes through collective bargaining and social dialogue, considered as best practice, is the Income Support Fund (“Fondo del Sostegno del Reddito”) the main idea of which is that it allows early retirement 5 years before the normal date at 70% of the salary but at 100% of social security payment. 18
  19. 19. Best Practices for Social Dialogue in the Banking Sector and New Challenges On July 11th, 1999, the new National Agreement was signed, including the union procedures for the settlement of the occupational spin-offs deriving from mergers or reorganization, involving for the first time the group leader bank, that committed themselves to negotiate with the trade unions and be made responsible of or – if possible – reinstate the redundant workers in another company of the group. In April 2000, the Government issued the institutional decree of the solidarity fund, called also income support fund, providing in its ordinary part the financing of the training courses and the one-year re-conversion for redundant workers for the reinstatement in other sectors or companies with the national agreement of the credit sector. And in its extraordinary part an early retirement plan up to five years before the maturity of the pension requirements. The ordinary part provides a parametrical contribution between the companies and the workers of the system, whereas the costs of early retirement are entirely charged to the company that resorts to it. The early retired worker receives an allowance equal to 70/75% of the last salary, 100% of it is paid, however, into compulsory social security in order to guarantee the worker a pension without great detriments The fund is only accessible through negotiation and a bilateral agreement of both parties: the company and the trade union. The fund’s life was expected to be 10 years to start from July 2000 and was therefore to expire on June 30th, 2010.But the further banking restructuring together with the reform of the Italian pension system (that has raised the pension age from 37 to 40 years of contribution) have led to the Agreement of May 25th, 2005, which ratified the extension of the life of the solidarity fund of the banking sector until June 30th, 2020. 3. The Importance of Collective Bargaining. In the Italian banking sector, the importance of collective bargaining is highlighted by its dual structure in two levels of negotiations. The 1st level refers to the National Collective Agreement signed by the Italian Banking Association (ABI) and the trade unions. The 2nd level refers to collective bargaining that leads to Company or Group Agreements signed by each company/group and the trade unions. Collective bargaining is supplemented by the information & consultation rights that apply to each company’s union and operate at the headquarters level and at the local/ branch level. The 1st level of collective bargaining and collective agreements deals with issues such as: • Minimum wages • Industrial Relations System • Definition and application of the National Agreement (Contractual Area) • Job evaluation (minimum classifications) • Professional salary 19
  20. 20. Εuropean Project DialogoS+ • Seniority salaries • Working hours • Rights and Duties • Rules of transfers • Minimum basic training and rules of continuous training, also with a joint bipartite commission called “ENBICREDITO” • Absences (holidays, illness, family, etc) • Limits, framework and rules about the 2nd level (company) negotiation • Maximum overtime per capita • Rules for individual dismissals The 2nd level of collective bargaining and collective agreements, i.e. the company and group agreements, deal with issues such as: • Variable wages: Company Productivity Premium (known as VAP, value added premium) • Evaluation of professional figures • Safety and health • Training schemes Benefits for all the colleagues: • Additional pension and retirement funds • Medical funds or insurance • Ticket for meals • Mortgages for home, loans, medical expenses etc. The 2nd level of negotiation has been also, in the context of the transformation of the Italian banking sector, enriched with the discussion and exchange of ideas over issues such as: • Occupational problems solved by transfers of groups of workers • Occupational problems for allocating redundant groups of workers in the “Fondo del Sostegno del Reddito” (the Income Support Fund) • Training modules and programs, both basic and continuous • Career advancement opportunities schemes • Evaluation system of each worker (job and results) • Incentive schemes (from 2006 onwards) 20
  21. 21. Best Practices for Social Dialogue in the Banking Sector and New Challenges 4. The Role and Influence of Sectoral Trade Unions. The role and influence of sectoral trade unions in the well structured system of collective bargaining operates through employee representation by the 9 trade unions that are present in the sector, where the union density in 2008 is estimated at 70%. Union structures correspond to the national/regional level and also to the group/company level with local, internal representatives. Workers members of each union elect their trade union representatives. The presence of sectoral trade unions is also strong at the 2nd level of negotiations for the company/group collective agreement especially in cases of company or group restructuring. Their role develops through bargaining over issues such as: • Managing redundancies by agreements and social schemes • Allocating redundant groups of workers in the “Fondo del Sostegno del Reddito” (Income Support Fund) • Intragroup labour mobility • Mobility (at local/regional level) and multipolarity, in the sense of spreading company structures throughout the territory, in order to avoid workers’ territorial mobility • New professional’s schemes • Training modules and programs, both basic and continuous. 5. The most important Challenges. As most important challenge, apart from preserving role of trade unions in collective bargaining and in regulation through social dialogue, is considered the training of the banking sector employees and, therefore, training has become a main issue in the Banking sector National Collective Agreement. This has led to the founding of the bilateral commission “Enbicredito” for discussion and approval of company training schemes, as well as to provisions for training rights for four weeks of training for new recruited people, in the first year of employment, and for a minimum of 24 hours per year for continuous training programs totally paid by the bank. Further with company unions agreement it is provided the right to further 26 hours of extra training of which 8 are paid and the rest 18 are not. There are also provisions on training costs for the new allocation for workers outsourced totally paid by “Fondo di Sostegno del Reddito”. 6. The preferred role for Social dialogue. In the structured collective bargaining and social dialogue that operates in the Italian banking system,the further implementation of the right to information and consultation is considered a tool for strengthening the effectiveness of social dialogue at company level. Information/consultation given to Company/Group Trade Unions at headquarters level can help in the effective regulation of: 21
  22. 22. Εuropean Project DialogoS+ • Industrial plans for restructuring or new strategies with/without employment implications for banking sector employees, Stock options and stock granting, statistics about recruitment, training, promotions, incentives schemes rules and costs, transfers, overtime work, occupational problems divided by region, gender, professional area • New safety plans, for accident and against crimes, • New branches allocation • New organization plans • Recruitment policies Further information/consultation rights operating at the company unions at the local level can alleviate: • Occupational problems for individual or small groups of workers • Implications of local transfers • Overtime planning • Local occupational health and safety plans • Recruitment policies and new branches launch 7. The areas where Social Dialogue may play a role. The social dialogue has a role to play in all old and new issues developed in the above mentioned outline of the social dialogue experience in the Italian banking sector. 8. Barriers to Social Dialogue. FABI considers that to avoid any barriers to social dialogue employee representatives should keep their target at the occupational level to issues concerning employment. Employers, because of the financial crisis, face the need to cut costs and the easiest/first option is to cut jobs. As a result, cutting costs in that way directly impacts the banking employees’ situation. Further, individualism is an ‘illness’ of the system. For example, there is the practise of incentive pay/salaries, which is Management by Objective (MBO) practise and one of the reasons that caused the current financial crisis. The result of incentive pays was that the employers had the incentive to sell everything to everyone, causing the disaster we have these days. Banks have been encouraging individualism. As a result, there are in Italy fewer members from Marketing Divisions or Private Banking Divisions because they tend to care less, as they feel they are in key positions. The issue needs to become a priority negotiated by the Unions in the banking sector. 22
  23. 23. Best Practices for Social Dialogue in the Banking Sector and New Challenges 9. Future trends in Restructuring and New Challenges. FABI sees liberalism as the main challenge. At the moment, there is no trend towards the “old time” banking system, which is to make savings and use money to invest. The current crisis is a failure of liberalism and the challenge is to abandon this model. Still, some people talk about the need to create new banking products, without understanding how these are related as a cause to the crisis. The challenge is first to face the crisis at national level but there is also need to act jointly to solve the problem at the global level. In terms of intervention, the International Monetary Fund, the World Bank and the European Union have to play a role in the crisis, in collaboration with the Unions. It is certainly a global crisis and there is need to have close cooperation among the Unions 23
  24. 24. Εuropean Project DialogoS+ Greece The key topic for Greece is the challenge to sectoral collective bargaining as a means for effective social dialogue. This appears to be a common theme between Greece and Portugal. 1. Major changes in the Banking Sector Employment Relations. The Greek banking sector has been since 1997 in a period of rapid transformation. This is clearly a distinctive period from the past. The Greek banking system had been operating till 1987 under strict administrative control. It is in the period 1987-97 that went through emancipation from excessive state controls and started adjusting to European and International standards. The period since 1997 is the period of restructuring through Acquisitions and Mergers. Greek banking is being reshaped by three factors: catch up (in terms of branches - the Greek banking sector is considered under branched -, ATMs per residents, rapidly growing market as banking sector GDP share), competition in a largely deregulated market and the influence of the ongoing European integration, and the privatization of public banks. Until now restructuring in the Greek banking sector has occurred via privatizations and mergers / acquisitions with ownership remaining mainly in domestic hands. Privatisations and mergers and acquisitions, even between publicly controlled banks, have implied major restructuring in the Greek banking sector. The restructuring process has been influenced by the governmental drive to commercialise the banks which are publicly-controlled. In this context, they have installed professional management that operate much more independently than they did in the past, delegated control to publicly- owned pension funds and, more recently, made Board appointments the responsibility of the General Meeting of share-holders of each bank. At some point after 2004, the process of distancing the state-controlled banks from the state was completed through full privatisation. Only two banks (Agricultural Bank and Post Bank) stayed under partial state control. 2. Ways of Regulation of the Banking Sector Changes. The restructuring process of the Greek banking sector has not been coupled with net job losses. Overall, there has been no particular institutional framework for Greece concerning mergers and acquisitions and European Union legislation and directives are applicable. But Mergers and Acquisitions did not result in any redundancies (layoffs), for three reasons. First, the trade union movement intervention has been decisive and effective. Second, the Greek Financial System is not saturated and there has been 24
  25. 25. Best Practices for Social Dialogue in the Banking Sector and New Challenges a positive political will on behalf of the Government for protection of employment. Third, the existence of strong Labour Regulations at the company level restricts the possi- bilities of collective dismissals. Not surprisingly, net employment growth has been recorded for years. However, some segments of the relatively older and less skilled employees have been affected. 3. The Importance of Collective Bargaining. Despite the decline in trade-union membership since the mid-80s, and the union represen- tativeness in Greece, the banking sector has remained one sector with the higher trade- union density. The process of privatizations and restructuring in the banking sector has led to conflicts and strong opposition to governmental decisions for mergers and privatizations in the banking sector throughout the late 1990s and in the early 2000s. But social dialogue procedures we may say that survived in the context of mergers and acquisitions in the previously publicly controlled banks. But during the last years, since 2004, are challenged. The system of collective bargaining in the banking sector has been operating since the early 1980s through the combination of sectoral level agreements where OTOE federation has the role of the contracting party from the labour side, and company level collective agreements where company level unions have the primary role. This structure of collective bargaining is challenged by the employers that in the late period, since 2005 increasingly oppose the signing of the sectoral collective agreements by OTOE. 4. The Role and Influence of Sectoral Trade Unions. In the past, there have been extensive practices of social dialogue in the banking sector where the practice has been guiding its expansion in the general system of industrial relations. But during the last 3-4 years, social dialogue practices are challenged both by the government and by the employers in the banking sector. In the last two-three years, there has been legislation attempting to reform pension rights and pension founds across the board and primarily in the banking sector. In the labour legislation area there have been attempts to change industrial relations and collective bargaining rights in the public utilities sector in a broader context of privatisation policies. These impacted also upon banking sector industrial relations. 25
  26. 26. Εuropean Project DialogoS+ 5. The most important Challenges. For the banking sector Federation OTOE, the most important challenge of the period relates to the role of the national sectoral collective agreement. There has been since the early 1980s a national sectoral collective agreement which has been regulating sectoral employment relations, but in 2008 the banking sector employers rejected the necessity of the national sectoral collective agreement and challenged the collective bargaining right of OTOE, and indeed challenged its right to recourse to Mediation and Arbitration services as provided by the labour law. The employers suggest that bargaining should operate only at the company level if this is necessary. Although they have a national association (EET), they claim their association is not an employers’ association that may participate in collective bargaining and in collective agreements at the sectoral level. On this ground, banking employers in Greece oppose collective bargaining at the sectoral level. This appears to be the most important challenge for the banking sector industrial relations in Greece. 6. The preferred role for Social dialogue. The Greek labour law enforces the basic trade union rights since 1982. Back then, OTOE estimates that with the government intervention in the banking sector, the outcome has been an improved situation in employment relations. However, in the 1990’s, due to the aggressive legislation, OTOE considers that they suffered successive attacks. In this context, the social dialogue practices have not been established and OTOE members believe that although banks do not enjoy wide public support, they have not been really interested in having effective social dialogue procedures, as they have enjoyed great financial power and aimed to pursue their objectives through this. This produced a lot of more conflicts from banking sector employees with banks and governments and a lot of strikes in Greece. OTOE consider a success that they managed not to have split ups in the trade unions, although they felt that they suffered a collective attack from the government and the employers. OTOE considers that social dialogue would have been an effective alternative to the conflict oriented policies adopted by governments and employers. 7. The areas where Social Dialogue may play a role. Social dialogue may contribute in enriching collective bargaining. The scope of collective bargaining itself with clear definition of the companies and types of workers falling under the national agreement, although it has been clearly defined, may be in need to bring uncovered areas under collective bargaining coverage. Wage and salary issues have been the main issue in collective agreements, and new issues on employability, beyond the scope of job security, in the sense of training rights, could be part of the social dialogue. Emerging issues related to new forms of employment and working hours, although working hours have been regulated by collective agreements and gender policies are areas where the social dialogue can provide positive effects. 26
  27. 27. Best Practices for Social Dialogue in the Banking Sector and New Challenges 8. Barriers to Social Dialogue. OTOE considers the employers reluctance to bargain at the sectoral level as the main barrier to social dialogue in the Greek banking sector. 9. Future trends in Restructuring and New Challenges. During the last twenty years, the banking sector has gone through a period of rapid and accelerating change under the influence of interdependent changes in the economic environment, in new technologies, in the market forces and in government policies concerning the institutional framework under which it operates. The move of the banking system towards liberalization and the privatisation of state credit institutions in countries like Ireland, Portugal, Norway and Greece, where deregulation has influenced the level of employment in a rather temporary positive manner, sets the scene of new challenges about the employment level and the mode of regulation of the employment relations in the Greek banking sector. 27
  28. 28. Εuropean Project DialogoS+ Portugal The key topic for Portugal is the challenge of expanding the role of the sectoral collective bargaining as a means for effective social dialogue. This appears to be to a certain extent a common theme between Portugal and Greece. 1. Major changes in the Banking Sector Employment Relations. The Portuguese banking sector has been changing since the late 1990s. During the first years of 2000’s some main Portuguese banks have merged, namely the Millennium/BCP Group, which is a result of the join operation of Banco Português do Atlântico, Banco Pinto e Sotto Mayor and Banco Mello, all of them old and important national banks. Millennium/BCP became the biggest private Portuguese banking group. The last major change in the Portuguese banking sector happened in 2006 when Banco Espirito Santo merged with the Banco Internacional de Credito. This second bank belonged 100% to Espirito Santo Group, which means that this merger has been the product of in group restructuring. From then on, there is only speculation about possible further M&As. The employment levels are in 2008 lower than during the 1990’s. Employment cuts have lead to a large number of retired people which were mainly made according to collective agreements. The replacement of those workers has been done either by new workers with academic degrees or new technologies. Special attention should be given to employment in the emerging call centres where lots of young people have been hired out of any collective agreement because they are not considered banking workers. 2. Ways of Regulation of the Banking Sector Changes. All changes that happened in the Portuguese banking sector have been regulated, as far as workers’ rights and benefits are concerned, by the collective agreement of the banking sector, where trade unions have initiated and leaded the negotiations. The Portuguese labour legislation is only applied in matters where collective agreements are absent. In these restructuring cases, Portuguese trade unions consider that they prepared good instruments in order to defend, in the best possible way, the workers they represented. Their bargaining influence applied in all mergers’ cases mentioned in the above analysis of banking sector restructuring. 28
  29. 29. Best Practices for Social Dialogue in the Banking Sector and New Challenges 3. The Importance of Collective Bargaining. In the Portuguese banking sector employees are protected by collective bargaining rights and the several Unions (SBC, SBSI and SBN are regional sectoral unions) that negotiated the collective agreements had been consulted and given their points of view about the introduction of new technology as well as about restructuring. Especially since the law about restructuring obliged companies to negotiate with trade unions representatives when they decided to reduce their employment level. Therefore, collective agreement must be applied and in all cases of negotiations implemented properly. 4. The Role and Influence of Sectoral Trade Unions. Sectoral trade union officers and worker’s councils have been very active along the restructuring process in Portuguese banking sector. Sindicato dos Bancarios do Centro (SBC) is a sectoral one, but they belong, as affiliate, to the national union confederation UGT, and when they need support in their aims, the confederation gives them all information and documents necessary to prepare campaigns of defence of their affiliates. Although there is no formal permanent monitoring for developments in the sector trade unions like SBC always keep their attention to companies, because they have inside presence through officers representing employees to SBC and SBC to employees, who may require regular meetings and information on behalf of SBC in order to notice any eventual movements on the normal life of the employment relations of each banking company. 5. The most important Challenges. Sindicato dos Bancarios do Centro (SBC) from the many possible challenges understand as the hardest that of the union affiliation by younger people due to labour legislation flexibility and security in their jobs. SBC underline their observation that new young banking workers recently admitted to the sector feel no need to join the trade unions. They defend their points of view by answering that they think trade unions are not necessary because their representatives are extremely politicised. In this attitude being a unionist is like being a strange person defending everything but the interests of the workers. And this is considered by SBC the main challenge to their trade union, together with their colleagues from the other regional sectoral unions SBSI and SBN and this need to be changed. 6. The preferred role for Social Dialogue. Even when SBC defends that information and consultation are relevant forms the imple- mentation of which should be defended by in the companies through the support to EWC’s including Unions representatives inside these structures, they give priority to their way 29
  30. 30. Εuropean Project DialogoS+ of defending that Collective Bargaining is the centre of their concerns in what means “Social Dialogue” between parts – employers and employees. That’s why SBC is joining forces to become member of a new Portuguese federation which includes the three regional banking unions (SBC, SBSI and SBN) and two insurances. This is considered the way to reach a stronger representation and create a greater pressure close to the companie’s staff managers and a form to obtain better guarantees negotiated and inscribed into collective agreements. 7. The areas where Social Dialogue may play a role. SBC considers that work organization, training and worker’s retirement and pre-retirement are policy areas where social dialogue should play a role. Of course considers that social dialogue outside collective bargaining also includes other areas, such as social benefits that are part of the social policy system, and also in areas such as the relevant and desired balance between work and private life under some company support either financial or any other issue such as working time. 8. Barriers to Social Dialogue. SBC considers that the only barriers are those created by the banking companies when they do not accept unions’ role and suggestions to improve employment relations through a better social dialogue. But SBC understand this barrier as a obstacle to effective collective bargaining which requires that when two partners, in order to be able to bargain effectively, need to understand each other’s needs and priorities about any subject that becomes a bargaining issue. 9. Future trends in Restructuring and New Challenges. In Portugal, the banking sector restructuring occurred mainly in the period between 2001-2002 when Millennium/BCP Group has enlarged by acquiring two other well known Portuguese banks, namely Atlantico and Sotto Mayor, becoming thus the first Portuguese private banking group. The policy arguments widely debated by economic advisors and journalists in the press it was that it aimed, as the only way to, defend the Portuguese banking sector by growing inside the national market. And that in this way it would operate as a barrier to the appetites of possible foreign acquisitions. SBC can say in 2008 that it was true. After that wave of restructuring banks from other countries only have the chance to get into the Portuguese market through the overture of their own branches or representa- tions. The exceptions are Spanish banks that have now interests in some Portuguese banks. About social dialogue in the Portuguese banking sector as seen by social partners, SBC considers that banking sector is a kind of “oasis” in the collective bargaining system, because it is understood in their country that banking is the most advanced sector in the Portuguese economic life and banks can be the greatest investors in new technologies. 30
  31. 31. Best Practices for Social Dialogue in the Banking Sector and New Challenges Malta The key topic for Malta is the challenge of dealing with “new comers” in the sector (through M&A’s), and in this context maintaining union membership and their role in social dialogue. This appears to be a common theme between Malta and Cyprus. 1. Major changes in the Banking Sector Employment Relations. The Maltese financial sector has continued to grow with the two main banks, HSBC Bank Malta and Bank of Valletta continuing to lead the market and post record results and a number of smaller players also doing well. The financial sector in Malta now employs over 6.000 people and directly and indirectly contributes 12% to GDP. There have been new business initiatives into such areas as Trust Services, Invoice Finance, Captive Insurance, Custody Services and Hedge Funds. While these have led to new employment opportunities and continue to flourish, they have not had any major impact on employment levels. Recent major market developments included Lombard Bank Malta buying 35% of Maltapost in October 2006 taking its shareholding to 60%. Synergies from this investment as of yet have not been seen in the marketplace. In October 2007, Marfin Popular Bank (Cyprus) purchased 43% in Lombard Bank Malta. Once again this has not had any major impact. An interesting development was the establishment Dutch/Turkish bank Credit Europe and Portuguese Banif Bank in the latter half of 2007. Banif Bank has plans to become the third largest player in Malta and establish an extensive branch network. The entry of these banks has increased competition for quality staff, with some employees from the bigger banks moving over to the new entrants. However, as of yet these new banks have not made significant inroads in the market. Nevertheless, HSBC Bank Malta plc has also started off-shoring support areas of work to India with the respective employees being redeployed to growth and income generating business areas within the Malta group. This process is being conducted with the involve- ment of the Malta Union of Bank Employees – MUBE to ensure all employees are efficiently redeployed and where possible also given the right opportunities to even improve their own career progression. MUBE and HSBC have both agreed to commit to ensure that the process of off-shoring is run smoothly. A major development for employment in the sector was the setting up of an International Call Centre by HSBC. The first phase of this project opened in November 2006 and after experiencing positive results was extended in May 2007 to double capacity and now employs 550 people. This is a significant increase in employment in this sector in a very short period of time. 31
  32. 32. Εuropean Project DialogoS+ 2. Ways of Regulation of the Banking Sector Changes. The main type of social dialogue which took place in these major developments with trade unions was information and consultation procedures. As these developments were positive for the sector, because they created employment opportunities, there were no major conflicts. However, MUBE was vigilant and took an active role to ensure that existing work practices were not affected and that new employment does not have any adverse effects in existing standards. Legislation concerning family friendly policies has been introduced but not yet fully effective since Collective Bargaining still plays an important role in what can really be introduced successfully in a way of compromise between Employers and Unions. 3. The Importance of Collective Bargaining. In Malta, the main tool for regulating banking sector employment relations remains collective bargaining. MUBE negotiates collective agreement for the categories of staff within the commercial banks and central bank and this is the main mechanism used to effectively engage in social dialogue with employers and resolve issues. It is only HSBC Bank Malta, as a multi-national bank, that has a Works Council as established by EU law to inform employees. In spite of the bank having two elected members, one clerical and one managerial, participating in the European Works Council, employees cannot really say they are better informed. Apart from a section on the bank’s intranet which employees can access with some information, nothing much else comes out of this. MUBE considers that in reality, stuff has to learn much more about the Works Council. 4. The Role and Influence of Sectoral Trade Unions. As Malta is a small island, MUBE officials together with bank representatives are those who are most active in any major change in the banking sector. MUBE takes a proactive role in any proposed change, new initiative or other development happening anywhere in the financial services sector. There is no legal provision for permanent monitoring of developments in the banking sector, however, this is done by the trade union by taking a proactive interest in any developments and by having a network of representatives throughout the sector, who together with members keep the union informed of all that is happening. 32
  33. 33. Best Practices for Social Dialogue in the Banking Sector and New Challenges The trade unions have also negotiated and inserted clauses in the collective agreement which necessitates that employers engage in dialogue with the unions prior to introducing a major development or change. This has assisted social dialogue taking place and has contributed to a good employer-employee working relationship. On the positive impact of Works Councils, MUBE considers that in spite of its good intentions, nothing much has come out of it yet. 5. The most important Challenges. The Maltese financial services sector is a dynamic one and continues to flourish. Employment levels have increased with a number of specialised roles and smaller players entering the market. However, the main contribution to employment came from the HSBC International Call Centre mentioned concerning the main changes that happened in the national banking system. Major developments have also occurred in the area of technology with internet banking, mobile banking, and more sophisticated automated channels. Overall, these have contributed to the provision of a more efficient and professional financial service. As the financial services market in Malta is rather mature, the main issue is strong competition where the main banks are very aggressive and have high targets levels which more often result in pressure on employees. Maintaining employee performance levels is an ongoing challenge and the Union plays a major role in supporting workers and ensuring the banks do not exploit employees. Another issue which needs to be monitored is that of outsourcing certain functions of the business such as security services and cash transportation. Banks are finding it more cost-effective and efficient to outsource such non-core tasks. While this had led to redeployment of staff (no redundancies) it is an area which MUBE closely monitors. As already indicated, MUBE is also involved in supporting and assisting employees who are moved from non-core business areas to growth areas through an offshoring process with work going to India. The MUBE aim is that no employee will be made redundant. 6. The preferred role for Social Dialogue. According to MUBE the main aim should be to introduce needed change in a manner which is not disruptive or destructive. A smooth implementation of new procedures, work practices, or products and services which are beneficial for the individual organisation and the financial sector is in everyone’s interest. The main objective should therefore be to work together, understand what is happening and agree on how the restructuring should take place. This will result in change taking place faster with less animosity or delay and allow the benefits to manifest themselves much sooner. The Union’s role is to ensure that adequate time-frames are set to enable “displaced” staff to be redeployed in an efficient manner, well retrained and well supported. 33
  34. 34. Εuropean Project DialogoS+ 7. The areas where Social Dialogue may play a role. MUBE considers that social dialogue has been most effective in current and anticipated developments relating to employment and the work organisation. However, it has also been used with good results when there have been changes in business structure and as of recent in work and life balance initiatives. With regards to training and redundancies, social dialogue on these areas mainly takes place as part of the collective bargaining process. However, Work-Life balance has become top priority as competition is becoming more aggressive, with HSBC as the main multinational leading well ahead in the aggressive nature of its practice. One must not exclude that other local banks step up their competitive levels in order to be able to survive in the market even though the consolidation of niche markets is a more obvious option to be taken by the smaller players. Business structures are expected to change in some areas, such as Wealth Management, where external resource is employed on strictly commission basis with the specific aim of targeting new business. This kind of attachment is also known as “tied agent” recruitment. Training and education will again feature as updating practice and specialisation is becoming more important especially where accreditation is concerned. The latest introduction is that of the Academic Commercial Training programme for such areas as those of Commercial Branch or Credit offices where advice and empowerment enable one-stop banking at its most efficient level. As to Information Technology, the recent change is the call for recruitment of IT officials whose function will be to service other areas of the HSBC group outside Malta using local resource as support and service function to other countries. 8. Barriers to Social Dialogue. MUBE considers that the main barrier to enhancing social dialogue is when one of the employers attempts to introduce a new work practice or initiative which affects established working conditions, without first consulting and discussing with the Union. Although in the recent past there have not been any major issues, there are instances when the Union had to intervene and take immediate remedial action. Such incidents can easily sour relations and hinder social dialogue. New issues would be those of excessive target setting, time-frames set too short and too much insistence on cost-effectiveness at the expense of investment and training of human resources, while Work-Life Balance remains for MUBE top of all issues. 34
  35. 35. Best Practices for Social Dialogue in the Banking Sector and New Challenges 9. Future trends in Restructuring and New Challenges. MUBE considers that the Maltese financial services sector is one of the most dynamic and successful of the whole economy. Banks are very profitable and working conditions and practices are some of the best on the island. There is no public debate about banking sector restructuring, although this was topical a decade or so ago when banks were being privatised. Banks have significantly restructured since then and with EU membership in 2004 consolidated their positions. Today, social dialogue practice in the banking sector is seen as functioning properly and contributing to the advancement of the sector. 35
  36. 36. Εuropean Project DialogoS+ Cyprus The key topic for Cyprus is the challenge of dealing with “new comers” in the sector (through M&As), and in this context maintaining union membership and their role in social dialogue. This appears to be a common theme between Cyprus and Malta. 1. Major changes in the Banking Sector Employment Relations. The Cyprus financial sector has continued to be subject to continuous changes. Indicative of these are the redundant employees in Arabic bank, the merger of Laiki, Marfin and Egna- tias Bank, the attempts to take over Bank of Cyprus by Bank of Piraeus and then by Marfin, the changes in ownership at Universal Bank, the new entry in the Cyprus financial sector of banks such as Societe Generale, Eurobank , Πειραιώς / Universal life, Εμπορική / Credit Agricole, and the expansion of Cypriot banks outside the Cypriot economy mainly in the south eastern Europe. These are the main aspects of changes and restructuring in the Cyprus financial sector. However, employment levels have risen and this enhances employment mobility between banks. There is the view that employment will continue rising. This is related to the governmental project to make Cyprus a regional financial centre. The ETYK union has had a major role in maintaining jobs with proactive policy. The introduction of new technology and its impact to work organisation may be of increasing importance. 2. Ways of Regulation of the Banking Sector Changes. The main way of regulation of the changes has been through various aspects of social dialogue, mainly collective bargaining in the context of a national system based on voluntarism and codes of practice. Remuneration, pay and employment issues have been dealt via collective bargaining. For other issues not directly affecting pay and job security the information and consultation procedures were used. As a matter of principle, in front of any change and restructuring ETYK gives priority to three issues. First, no impact on pay and remuneration, second, preservation of jobs, and third, homogeneity and equal treatment at the workplace. 36
  37. 37. Best Practices for Social Dialogue in the Banking Sector and New Challenges 3. The Importance of Collective Bargaining. The main tool for employment relation regulation is collective bargaining. ETYK negotiates collective agreement for the categories of staff within the banks which is the main mechanism used to effectively engage in social dialogue with employers and resolve issues. However, in the context of applying the “acquis communautaire”, ETYK initiated the formation of EWCs in Bank of Cyprus, in Marfin, in Elliniki Bank. There is also participation in the EWCs of Barclays and Societe Generale. 4. The Role and Influence of Sectoral Trade Unions. Financial sector employees in Cyprus are all represented by ETYK. ETYK bargains at the sectoral and company level. Even the representatives at EWCs are nominated by ETYK. 5. The most important Challenges. ETYK consider that the Cypriot financial services sector is dynamic and further M&As are expected to provide the major challenges in the near future. The adoption of new technologies also may impact on employment relations and employment levels by reshaping work organisation. 6. The preferred role for Social Dialogue. According to the ETYK views, the main aim should be to promote the three (mentioned above) basic principles of ETYK in cases of changes and restructuring in the financial sector. First, no impact on pay and remuneration, second, preservation of jobs, and third, homoge- neity and equal treatment at the workplace. Further to deal with unexpected and sudden changes, and indeed, to promote continuous skill upgrading and vocational training of the employees. 7. The areas where Social Dialogue may play a role. ETYK considers that jobs protection, and in the case of adjustment to employment levels the bargaining and participation in shaping voluntary redundancy schemes, remain areas where social dialogue has a role to play. Also Social Dialogue may influence organisational restructuring that affects jobs and employment levels and has had and may further work with regard to further training of banking sector employees. 37
  38. 38. Εuropean Project DialogoS+ 8. Barriers to Social Dialogue. ETYK considers that the main barrier to enhancing social dialogue is when “new coming” employers do not accept established collective bargaining procedures and try to by-pass them. Up to the present this has been dealt with effectively, but with any new M&As forthcoming this challenge might become more important. 9. Future trends in Restructuring and New Challenges. The Cyprus financial service’s sector is dynamic and until now social dialogue has been successful in safeguarding employment levels and employment rights of employees. ETYK considers the need for restructuring as a necessity but promotes the three main principles mentioned above. ETYK notes initiatives by foreign banks to change the established practices and act unilaterally. This may be aggravated with the presence of more foreign banks and their attempts to challenge the established system of collective bargaining and social dialogue. But today, social dialogue practice in the banking sector is seen by both sides (ETYK and employers KEST) as functioning properly and contributing to the advancement of the sector. 38
  39. 39. Best Practices for Social Dialogue in the Banking Sector and New Challenges Bulgaria The key topic for Bulgaria is the challenge of building social dialogue capacity through increasing membership and sectoral collective agreements. This appears to be a common theme between Bulgaria and Romania. 1. Major changes in the Banking Sector Employment Relations. In the period 2002-2008 there where different events regarding the changes in the banking sector. In 2003 one of the biggest Bulgarian bank was privatized – DSK (now – Banka DSK EAD) which was bought by the biggest Hungarian bank – OTP bank. In 2007, we had some mergers in the banking sector – Bulbank, HVB Bank Biochim and Hebrosbank were merged in one bank – Unicredit Bulbank AD. This event happened because of the merger between the ‘mother’ companies Unicredit (Italy) and HVB (Germany). In 2007 Bulgarian Post Bank and DZI Bank were merged in Eurobank EFG Bulgaria AD – the former 2 banks had one owner – the Greek Eurobank EFG. This period 2002-2008 is important also with regard to the process of the modernisation of the Bulgarian banks – all banks changed their software for executing their activity in real time. The employment trends in the period 2002-2008 have been positive as most of the Bulgarian banks increased their staff each year. It can be observed that in many cases there is a shortage of well experienced bank personnel. 2. Ways of Regulation of the Banking Sector Changes. The process of merging between Bulbank, HVB Bank Biochim and Hebrosbank was regulated by social dialogue through information and consultation procedures and through collective bargaining agreements. The similar process in EFG Eurobank Bulgaria was not regulated by a social dialogue because there were no trade unions in the former Bulgarian Post Bank and DZI Bank. 3. The Importance of Collective Bargaining. As mentioned, there is a social dialogue procedure only in these cases where there exist trade unions and employee representation in the respective banks. The Bulgarian labour legislation provides all rights to the employees to be informed by their employer. But in practice, these rights can be realized only in cases where there exist and operate trade unions which defend the interests of their member employees. 39
  40. 40. Εuropean Project DialogoS+ 4. The Role and Influence of Sectoral Trade Unions. At the current stage, there has been no influence by unions at the sectoral level because of the lack of sectoral level union. It has been initiated and formed by company level unions. Therefore, the main representative bodies which were active in the processes of major changes in the banking sector were the company trade unions. It is noteworthy that despite the strong foreign presence in the Bulgarian banking sector there is only one banking group with EWC which has been established in Unicredit in 2007. 5. The most important Challenges. In this new context, Bulgarian trade unionists consider that there is more than one challenge to be faced. First it comes the demand for a growing number of banks employees in the expanding banking sector and the shortage of adequate numbers of well educated and with minimum experience bank employees. This sets the scene for the process of unionisation. Trade unions exist and operate only in the biggest banks. The periodic introduction of new IT is also an issue raising training concerns. In this context, Bulgarian trade unionists consider very important that an employer’s banking organization is established in Bulgaria. Before that it is impossible to organize a social dialogue at the sectoral level. 6. The preferred role for Social Dialogue. Bulgarian trade unionists in the banking sector consider that all types of social dialogue procedures are important to them. From bargaining in a more successful way to become and stay well informed about the employment situation in each individual company. The collective bargaining and the collective agreements are considered very important for the social benefits offered to the employees. On the other hand, the retraining of the employees is considered very important in the process of globalisation and augmentation of the competition in the world market. 7. The areas where Social Dialogue may play a role. According to the Bulgarian trade unionists, their experience suggests that social dialogue is more effective for the process of training and for the social benefits offered to the bank employees. 40
  41. 41. Best Practices for Social Dialogue in the Banking Sector and New Challenges 8. Barriers to Social Dialogue. According to the Bulgarian trade unionists, the biggest barrier is the low level of unionisation in the banking sector. There are trade unions only in the biggest Bulgarian banks, namely in Unicredit Bulbank, United Bulgarian Bank and DSK Bank. Another barrier is the lack of employers’ organisation in the banking sector. They initiated the Federation of Trade unions in the financial sector, but cannot negotiate with banking employer’s organization because of its absence. 9. Future trends in Restructuring and New Challenges. In a nutshell, according to the Bulgarian trade unionists, unionisation and establishment of collective bargaining procedures appear to be the major present and future challenges. 41
  42. 42. Εuropean Project DialogoS+ Romania The key topic for Romania is the challenge of building social dialogue capacity through increasing membership and sectoral collective agreements. This appears to be a common theme between Romania and Bulgaria. 1. Major changes in the Banking Sector Employment Relations. The Romanian banking sector has been subject to major changes. All banking companies where unions exist, members of the Trade Union Federation from Insurance and Banking, have been privatised and been through permanent changes. Namely these Romanian companies are: • BRD Group Societe Generale; • Raiffeisen Bank; • Bancpost – EFG EUROBANK; • Unicredito Produzzione Acentrate; • Romexterra – MKB Group; • ASIBAN – AMMA GROUP; • BCR INSURANCES – Vienna Insurances Group; • ASIROM – Vienna Insurances Group 2. Ways of Regulation of the Banking Sector Changes. In the context of the national labour law in these banks there are Collective Labour Agreements, which the union’s and employer’s associations negotiate on an annual basis. These companies have also established information and consultation procedures between social dialogue partners. The relevant legislation that enhances trade unions for and to during their negotiations with employers are: • Law no. 53/2003- LABOUR LAW; • Law no. 54/2003- Union Law; • Law no. 130/1996- regarding Collective Bargaining; • Law no. 168/1999- regarding Labour Conflicts. 42
  43. 43. Best Practices for Social Dialogue in the Banking Sector and New Challenges 3. The Importance of Collective Bargaining. The Romanian legislation provides that companies negotiate Collective Labour Agreements with the representative unions or, in the absence thereof, with employee’s representatives. The trade unions consider that the only efficient tool is the Collective Labour Agreement by means of which they have tried to regulate all the above mentioned aspects of employment relations in the banks concerned. However, they notice the need to differentiate between the legal provisions and what really happens in practice. 4. The Role and Influence of Sectoral Trade Unions. The Romanian trade unions FSAB (TUFIB) are developing their activities and consider it is them that have the main role and the greatest contribution, compared to other bodies. They aim to monitor developments and intervene at the company level, by the company unions and with the support of the federation FSAB and “CNS Cartel ALFA” confederation. 5. The most important Challenges. FSAB (TUFIB) consider that there are many challenges but the most important for banking sector employees appears to be the work organisation, which means the implementation of what they call ‘work quotas’ and the ‘wage system’. For them, the main challenge is to increase membership and influence over a broadening policy agenda. 6. The preferred role for Social Dialogue. FSAB (TUFIB) consider that the most important aim relates to vocational training and permanent vocational training. In Romania there is a law that allows the employer’s association and unions in a certain branch of activity to establish sectoral works councils, which would especially deal with vocational training and permanent vocational training of employees. Unfortunately, it is not possible to establish such a sectoral works council in the branch of Insurances and Banking, because there is not an employers’ association yet established in Romania. 43
  44. 44. Εuropean Project DialogoS+ 7. The areas where Social Dialogue may play a role. FSAB (TUFIB) consider that there are two provisions in the collective labour agreements that should be implemented properly: a) regarding service outsourcing, where the unions and employer’s association agree that the service supplier is bound to take over the outsourced employees and keep them for one year with all the rights from the company they left. b) On leaving the company, fired employees are given a certain number of salaries as compensation. As in the last years there have not been any major changes and all provisions of collective labour agreements between unions’ and employers’ associations were enforced, the above mentioned provisions indicate that trade unions through collective bargaining can deal with existing, new and emerging issues. 8. Barriers to Social Dialogue. FSAB (TUFIB) they consider, although there is much room for improvement, there are no major difficulties to approach new issues in the relationship between unions and employer’s, but an employer’s association at the sectoral level would facilitate social dialogue procedures. 9. Future trends in Restructuring and New Challenges. FSAB (TUFIB) consider that in 2000-2005 there has been massive restructuring in the Romanian Banking and Insurance sector. Now they are past this period and there is no massive restructuring anymore and no major approach issues in the relationship between unions and employers’ association. Restructuring has not been since then a major topic of public debate. Only the implications of the global financial crisis can make it again a hot issue for both employees and bankers. 44
  45. 45. Best Practices for Social Dialogue in the Banking Sector and New Challenges Conclusion The experience of social dialogue for regulating the transformation of banking sector restructuring in nine old and new EU member states indicates that, although sectoral industrial relations remain mainly national, social dialogue is not only theory, or part of a normative approach, but has provided noticeable “best practices” of social dialogue in the banking sectors at the national level. The “best practices” summarised in this report can help to “learn from each other” in meeting the new challenges. In half of the countries examined in this report social dialogue has been used as a driving force for economic and social reform in the banking sector, with practical solutions that helped in preserving the European Social Model. These experiences of social dialogue become more valuable under the new conditions of the ongoing financial crisis that affects also employment relations in the banking sectors. 45
  46. 46. Εuropean Project DialogoS+ 46
  47. 47. 1. Design, Implementation and Analysis of the Forecasting Exercise Dr Christos Α. Ιoannou Panagiotis Panagiotopoulos Dr Lampros Stergioulas Report for INE - OTOE prepared for the project DialogoS+ 47
  48. 48. Εuropean Project DialogoS+ Executive Summary The DialogoS+ Project aims to promote the role of social dialogue in the banking sector, strengthen the link between old and new members and make European social dialogue a force for innovation and change. DialogoS+ builds on the successful implementation of the previous project Dialogo.S by using new tools such as roadmapping and simulation of social dialogue. It elaborates on the communication mechanisms of the European banking sector trade unions’ community in order to facilitate exchanging important experiences, creating and diffusing knowledge, as well as identifying and transferring best practices. Given the context of the international crisis in the banking sector, the outcome of DialogoS+ aims to provide important added value on investigating how the crisis may affect employment relations and social dialogue dynamics (diagnosis) and analyze what is and should be the role of employees within this environment. In order to achieve these objectives, DialogoS+ applies the concept of roadmapping as a knowledge creation and strategic decision-making process. A roadmap is a collaborative strategic decision-making tool mainly applied in technology, science and industry with the purpose of deliberating and disseminating strategic decisions. Its main concept is based on analyzing the gaps between desired and expected future situations for the purpose of proposing actions to bridge them. The DialogoS+ community implements this innovative exercise in order to stimulate and promote dialogue, as well as reach consensus on priori- ties and objectives over its key issues. Through the roadmapping process, the opinions and predictions of both employees and trade union experts over these key issues were recorded and analysed. The present docu- ment introduces the concept of roadmapping and explains how this was perceived and applied under the scope of DialogoS+. Based on the state-of-the-art analysis of roadmapping and the specific methodology applied, the thematic areas and main conclusions of the roadmapping exercise are presented and discussed. 48
  49. 49. Design, Implementation and Analysis of the Forecasting Exercise 1. Introduction 1.1 Overall Aims of DialogoS+ Constructing a social European Union where the mechanisms of social dialogue will provide the means to efficiently regulate employment relations in the context of financial stabil- ity while in parallel creating an environment of working security and fruitful collaboration between the trade unions, the employers and all social stakeholders has always been the vision of European citizens. As proved by the 2008-2009 crisis in the banking sector, it is probably the first time in history that modern economies seem to be so interrelated with each other, in a way that individual governments may no longer have full control over eco- nomical challenges. International cooperation seems to be an a priori condition for handling the complexity of potential crisis. Under this uncertain environment, evaluating and strengthening international experience on social dialogue in order to exploit knowledge and expectations over critical issues of banking sector employment relations becomes a significant prerequisite in terms of decid- ing upon future actions and trade unions’ strategic objectives. The aims of DialogoS+ is to promote social dialogue in the banking sector, in terms of identifying trends and changes to come, develop a roadmap as a collaborative strategic decision-making tool and disseminate this knowledge through a series of activities. The main objectives of the project are sum- marized as following: 1. Identify trend and changes to come in the sector from the employers and the employee’s point of view. 2. Roadmap industrial relations practices from the banking sector of nine countries. 3. Promote knowledge from the above through training material. 4. Train participants (opinion leaders) through workshops. 5. Develop enduring communication and social dialogue tools which will facilitate the participation of underrepresented groups. The above objectives were applied in seven tasks which were carried out under the scope of the project. Figure 1 maps these tasks and explains their interrelation. The basic stages of the project were: creating and exchanging knowledge, disseminating and evaluating. The project tasks consisted of the following (for more details see the project website): • Initiation workshop. • Design, implementation and analysis of the forecasting exercise (roadmapping). • Training package development. • Workshops on future developments of the European financial system and its implications on bank employees. 49
  50. 50. Εuropean Project DialogoS+ • Role playing. • Simulation of Social Dialogue through videoconference. • Evaluation and Policy brief - Closing conference in Cyprus. Task 3 Τask 1 Task 2 Task 4 Task 7 Task 5 Initiation and Roadmapping Stage Evaluation and Closing Stage Objectives 1 and 2 Objective 5 Task 6 Dissemination Stage Objectives 3,4 and 5 Figure 1: DialogoS+: Project Overview In particular, DialogoS+ elaborates on the outcome of previous European initiatives on the evaluation of social dialogue in the European Banking Sector, the exchange of processes and the transfer of best practices among transnational partners, such as the previous Dialogo.S and the Communicate project which also focused on the state-of-the-art comparative analysis of trends and practices with the purpose of promoting communication and social dialogue tools. Various data collection techniques were used, focusing on questionnaires and literature analysis. The aim was to develop an in-depth understanding on what constitutes a successful practice in the banking sector social dialogue and how leaders in the European field benefit from this knowledge. The 2008-2009 crisis in the banking sector was a fundamental element of DialogoS+ affecting its whole process and results. Throughout the execution of the project, the extent of the crisis was becoming more and more apparent in society and especially within the banking sector. This environment of uncertainty triggered a debate over the role of bank employees and their trade unions regarding the origins of the crisis and its results over sensitive issues such as job security. These findings were also recorded in DialogoS+, having an important impact on its outcome. 50

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