A plan by Permanent TSB to reduce staff numbers and alter managerial roles is to be the subject of new talks with unions following a hearing at the Labour Court.

Unions are opposed to plans by the bank to "twin" about 40 of its 105 branches as part of a cost-cutting programme it says is vital if it is to remain competitive.

The move would result in about 20 Permanent TSB managers being appointed to run two branches each.

The bank also proposes to centralise and automate its credit lending function, which it says constitutes a significant workload for senior staff in branches.

As a consequence, job numbers in branches would be reduced by about 60, through voluntary severance and natural wastage.

The bank says the measures are covered by existing flexibility and change agreements with unions. This is disputed, however, by the unions concerned, the ATGWU, Siptu, Mandate and Amicus. They told the court that making a manager responsible for two branches would involve a fundamental change to a March 2003 agreement on terms and conditions of employment.

This agreement provided for one manager to be in charge of each branch, the unions argued.

For the bank to alter the staffing or management structure of branches would require renegotiation of existing agreements, the unions said. While there had been meetings with management on the proposed changes, they had involved exchanges of information only and no negotiations had taken place. Permanent TSB told the court that the changes were urgently required to address its competitive position.

When compared with competititors, its cost structures were very unfavourable and ultimately threatened the viability of the business, the bank said.

It argued that the introduction of branch twinning did not impact on terms and conditions of employment, and pointed out that no staff member would suffer financial loss as a result of the changes.

In a recommendation just published, the court said the parties should re-engage on the proposals and negotiate a resolution to the bank's problems.

Discussions should centre on the impact the proposals would have on the managers concerned and on existing agreements, it said.

If the parties failed to agree on all aspects before the end of September, they could return to the court for a further recommendation, it said.