The Financial Services Union (FSU) has called on KBC Bank Ireland and Bank of Ireland to clarify whether employees at the Belgian-owned bank will be able to transfer as it prepares to sell its €9 billion of performing loans to the State's largest bank.
Neither lender has provided confirmation as to whether so-called Transfer of Undertakings (Protection of Employment) regulations, or TUPE, allowing employees to move on existing terms under a business or assets sale, will apply to the planned disposal of KBC Bank Ireland loans and deposits to Bank of Ireland.
While KBC Bank Ireland, which has about 1,300 employees, does not recognise unions, FSU general secretary John O’Connell said that a “substantial amount” of the bank’s staff were members of his organisation.
Almost 400 KBC staff joined a virtual mass meeting on Tuesday afternoon, four days after the bank announced that it planned to exit the market with the sale of most of its business to Bank of Ireland. They were told on the call that the union has engaged a legal team to advise on the complexities of competition law with a view to making a submission to the Central Bank and the Competition and Consumer Protection Commission (CCPC), which must approve the planned deal.
“The large turnout of KBC staff at today’s meeting is a clear indication of the frustration, fear and confusion that staff are feeling around this announcement,” Mr O’Connell said. “There was an avalanche of questions posed, particularly around the issue of TUPE and future engagement with KBC. It is a moral responsibility of both employers to respond to this fundamental question from staff.”
The FSU wrote to both banks on Friday seeking urgent meetings and requesting clarification around the content of the memorandum of understanding outlining a planned loans and deposits sale and TUPE arrangements.
Staff shock
“Staff are shocked at the sudden announcement and are entitled to receive assurances from their employer on the future for their jobs,” Mr O’Connell said.
In response, KBC Bank Ireland said that while it understood Friday morning’s announcement had raised questions among staff, it wanted to repeat that its talks with Bank of Ireland had “only just started”.
A spokesman for KBC said: “Discussions are ongoing between KBC Bank Ireland and Bank of Ireland. Any implications for staff are yet to be determined and will be shared in the first instance by KBC Bank Ireland with its employees.
“We actively engage with our staff through our employee council and cascade communication via line managers and plan to do so also in the coming future.”
The CCPC has opened an early phrase examination of the proposed deal and have called for submissions from interested parties by May 4th.
The surprise announcement that Brussels-based KBC Group plans to exit the Irish market after more than four decades came eight weeks after UK lender NatWest decided to put its Ulster Bank unit in the Republic into an orderly wind-down over the coming years.
Both have struggled to make an acceptable return in a low interest-rate environment and also in a country where banks have to hold much higher levels of capital against mortgages than the average European lender.
Some 300 Ulster Bank employees are earmarked to transfer to AIB, with about €4 billion corporate and small business loans.
Ulster Bank chief executive Jane Howard has also said that job transfers "will be core to any negotiations" on further loan or asset sales as part of the wind-down. Permanent TSB is in talks to acquire a substantial part of the UK-owned bank's remaining loans.
