A row has erupted within the Dublin branch of BNP Paribas over a decision by the French bank to alter the pension entitlements of a number of employees.
Up to 30 of the bank's Dublin-based staff who are currently members of a defined benefit scheme have been told they are to switch to a defined contribution scheme from September 1st.
They have accused the bank, in legal correspondence seen by The Irish Times, of unilaterally changing their terms and conditions of employment.
They have also demanded that the bank's Paris-based head of human resources be summoned to Dublin to explain why staff there are being treated differently from their colleagues in Norway.
The employees say a plan by the bank to withdraw a defined benefit scheme in Norway was abandoned in the face of opposition by its staff there.
The bank, however, has denied discriminating against its Dublin-based employees and says the change from a defined benefit to a defined contribution scheme is group policy.
Staff were told by the bank on Friday that the change is to go ahead this week as planned.
Defined benefit pension schemes are the most valuable type of pension for workers, as they guarantee that members will receive a pension based on a percentage of their salary for each year of service.
The defined benefit scheme at BNP Paribas in Dublin has been closed to new entrants since September 2002.
However, between 20 and 30 employees who joined the bank before then have continued to be members of the scheme. They include staff at all levels including management.
In a letter to the employees on June 23rd last, the head of the bank's Dublin branch, Francois van den Bosch, said the defined benefit scheme had become "untenable". He said this was because of "volatility" arising from the prescribed nature of the new international accounting standard for pensions, IAS 19.
"This coupled with current volatility in investment markets and increased life expectancy rates have resulted in a defined benefit scheme that has moved into deficit."
He said the defined benefits already accrued by staff would be preserved as a deferred pension. However, future benefits would be funded through a defined contribution scheme.
The employees' objections to the change are outlined in a letter to the bank by Maureen Dolan of McCann FitzGerald on August 2nd. Ms Dolan said a defined benefit pension scheme was specifically provided for in the contracts of employment of a significant number of the scheme's members.
"It would appear that due process has not been followed in relation to these employees. At the very least, consultation with these Dublin scheme members would be required.
"It is not open to an employer to unilaterally alter an employee's terms and conditions of employment," she said.
Ms Dolan said that as the Dublin scheme was smaller than the Norwegian scheme, which had been retained, "we query why our clients should should be put in a less favourable position than their colleagues in the BNP Paribas Oslo office".
In a reply on August 17th, Mr van den Bosch said the bank disputed "entirely" the contention that due process had not been followed. "At all times, the bank has sought to act reasonably and in the best interests of its pension members," he said.
In a further letter to the bank last Tuesday, Ms Dolan said as her clients' concerns had not been addressed, they could not accept that the change should go ahead on September 1st as planned.
She asked that it be suspended pending a meeting in Dublin between her clients and the bank's Paris-based head of human resources, Bruno M Carlier.
Staff were told on Friday, however, that this request had been refused. Attempts to obtain a comment from BNP Paribas were unsuccessful.
