IBOA's legal threat over Ulster pay and pensions
IRELAND - The Irish Bank Officials Association (IBOA) is preparing to take legal action against Ulster Bank, a subsidiary of the Royal Bank of Scotland (RBS), and has raised concerns with the Pensions Board following a breakdown of talks on pay and pensions.
Ulster Bank announced in August that it would close its defined benefit (DB) scheme and cap the annual increase in pensionable salary at 2%, or the rate of inflation, whichever is lower. (See earlier IPE article: Ulster and RBS salary cap plans ignite unions)
At the time IBOA rejected the proposals and requested that all pay and pensions issues be discussed through an independent mediator. However, following Ulster Bank's decision to withdraw from the talks last week, IBOA claims legal action is its only alternative.
The union is planning to launch a case against Ulster Bank/First Active for breach of contract in relation to 5,000 staff in the Republic of Ireland and Northern Ireland, over its failure to honour existing contracts for staff, which cover a number of payments that the bank has withheld.
It also criticised the bank's intention to offer workers new contracts of employment, arguing the new contracts are "significantly inferior" and provide a new clause that will "significantly undermine our members' pension entitlements in future".
Larry Broderick, general secretary of IBOA, claimed the legal action is an attempt to avoid industrial action by members, but added: "It is regrettable that the bank's refusal to negotiate under the agreed mediation process has forced us into having to contemplate taking this issue through the courts. But unfortunately we have been left with no alternative."
In a memo to members, the union highlighted that while the scheme's trustees are meeting to consider the bank's pension changes, IBOA in the meantime is "separately taking its own legal advice and is concerned about the bank's proposals both in terms of their impact and the manner of their imposition".
The union also informed members that it had contacted Brendan Kennedy, chief executive of the Pensions Board, to seek clarification on the justification of the proposed pension changes, in particular the cap on pensionable pay.
But it also revealed it had highlighted its concerns that the bank is allegedly "inducing staff by virtue of the 10% contractual profit share payment to make decisions on pensions that could have a detrimental impact on the future".
Broderick stated: "The new contracts are due to be issued next week for completion by mid-November. We are seriously concerned that staff may be unfairly pressured to meet this impossible deadline considering that the decisions they are being asked to make may be life-changing - but not for the better."
A spokeswoman for Ulster Bank, said: "We continue to communicate with our employees directly regarding pay and pensions 2009."
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