Why Ulster Bank staff are saying 'No!'
Issued : 22 October 2009
A key factor in the current crisis in the global banking system has been the irresponsible selling of financial products which has been driven by the pursuit of targets in order to generate lucrative bonuses for those at the top of the institutions.
A further consequence of this practice has been the undermining of the traditional relationship between the bank and the customer. The local bank manager has become less likely to be seen as a trusted financial advisor offering prudent counsel and more likely to be seen as the head of an intensive marketing operation offering credit extensions where none have been sought and turning a simple telephone query into a high pressure sales pitch about the bank's latest offer.
Even though the economic boom has long since past, the pressure on bank staff to keep meeting their sales targets is unrelenting. Many - not least bank workers, themselves - have highlighted the need for an end to this culture and a return to the traditional model of banking - based on prudence and stability and which operates as the servant of the economy and society and not their master.
Against this backdrop, therefore, it is hard to credit the recent developments at Ulster Bank - which, in its recent proposals to its staff, appears to be intent on creating a more extreme version of the current discredited banking model which has caused so much havoc in this country and elsewhere in the world.
The Chief Executive of Ulster Bank is one of the few bank leaders who has survived the recent turmoil within the industry. But it seems his institution has learned nothing from these events. Having already 'banked' the co-operation of staff for over 1,000 redundancies this year, he has now short-circuited mediation efforts in order to launch an unprecedented assault on the terms and conditions of those staff who remain.
Staff are themselves being subjected to high pressure techniques aimed at "persuading" them to sign up to new contracts which will result in lower earnings into the future, longer pay scales and a much reduced pension on retirement. The inducement for staff to accept this bad deal is the payment of a 10% allowance which the Bank has so far withheld even though it is contractually obliged to pay it and even though its parent company, RBS, has paid the allowance to its lower paid staff without any pre-conditions.
So times are tough. Why should the internal affairs of this Bank concern me?
You should be concerned because if they succeed, Ulster Bank's current proposals will effectively create a bank with no future for its staff - which, in turn, will be very bad for customers. If you want a long-term career in banking, you wouldn't join Ulster Bank where it may soon take over thirty years to get to the top of your scale and where you would retire into poverty under the new contract on offer.
A more likely scenario for the future would be that staff would not wish to remain with the Bank for too long. So Ulster Bank customers could expect a constant turnover of staff - with the result that the chances of building sound customer relationships or of developing a broad base of institutional knowledge and experience would be negligible.
This low-cost model would undoubtedly boost profits for the Bank and no doubt enhance the bonuses of those at the top of the institution. But for customers the modern banking experience - which reflects a culture driven by sales rather than service - would become even more uncomfortable.
OK. It's bad news for Ulster Bank customers. But I don't bank with them.
If Ulster Bank were to succeed in pushing through this new low-cost model, the competitive pressure on other banks to follow suit would be intense. The opportunity to recast the banking system within a more socially responsible and economically sound framework could be lost forever. Furthermore, it would be improving the chances of a further meltdown in the financial services sector in the not too distant future.
So IBOA's struggle with Ulster Bank is not just a simple industrial relations issue. It is a fight to prevent an even more irresponsible strain of banking infecting the rest of the financial services sector and wreaking even more hardship on customers and more damage to the economy.
The support of the public is vital to ensure that the Bank understands that, without respect for staff, it is difficult to see how it can fully respect its customers. We would encourage everyone to write to Mr. Cormac McCarthy, Chief Executive, Ulster Bank, George's Quay, Dublin 2 to ask him to return to negotiations to achieve a settlement that treats staff with respect.
Larry Broderick
General Secretary
