The Cyprus Union of Bank Employees (ETYK) has objected to a new voluntary exit scheme at Bank of Cyprus. It argues that compensation set at the same level as in 2016 is now worth less in real terms, while banks are reporting record profits. The scheme aims for the departure of around 50 employees and comes roughly six months after the bank’s previous offer.
Scheme announced alongside nine-month results
Bank of Cyprus management first mentioned the new scheme at a press conference on its nine-month financial results. It said the scheme was meant for a small number of staff.
According to information reported by Politis, the maximum tax-free compensation is €200,000, with an additional 10% bonus for certain categories of employees.
In a circular to its members, ETYK said the bank had told the union it intended to go ahead with a new Voluntary Exit Scheme for around 50 employees. The union then wrote to the bank stating its disagreement and serious reservations.
Union questions the need for another scheme
ETYK said a new scheme was unnecessary, since the bank had offered one only about six months earlier.
“The continuous offering of Voluntary Exit Schemes creates disruption and insecurity among colleagues and does not contribute to a stable and smooth working environment,” the union said.
Compensation described as outdated and inadequate
The union also said the compensation on offer was “now outdated and inadequate”. It pointed to the sharp rise in the cost of living and the cost of money. It also pointed to the precedent set by schemes that other organisations in the sector have offered recently.
According to ETYK, €200,000 was a satisfactory incentive for early departure in 2016. Ten years later, it said, the same amount no longer meets employees’ real financial needs.
The union added that in 2016, during a period of losses, banks offered €200,000. Today, during a period of windfall profits and very high bonuses for senior executives, the amount has not changed. It said that once the loss in the value of money is taken into account, the amount offered today is in practice lower.
“The precedent set by Voluntary Exit Schemes recently offered by other organisations in our sector, which have now shaped a new reality in the banking sector, cannot be ignored either,” ETYK said.
Age exclusion criticised
ETYK also raised concerns about the reasoning behind the eligibility criteria. It said the bank cites the need to modernise and renew its workforce, but excludes from the scheme employees who have reached the age of 62.
“This provision contradicts the very objective the bank invokes and constitutes unfavourable and discriminatory treatment against this category of colleagues on the grounds of age,” the union said.
Meeting requested
ETYK has asked Bank of Cyprus for a meeting to discuss the matter. It said it hopes that the bank, “even now, will recognise the need for corrective action”.
