BANK employees yesterday turned down an early retirement scheme offered to a section of Popular Bank staff, and served notice that any similar plan that might follow must bear their stamp of approval.
The decision was taken at a general meeting of the Cyprus Union of Bank Employees (ETYK) to discuss an early exit plan put to around 180 staff at the Popular Bank.
The meeting was called amid rumours that a number of employees were being approached by management and coerced into agreeing to early retirement.
The scheme is part of major downsizing at Popular that also involves shutting down a number of branches here and in Greece.
The bank, which needs some €1.8 billion in bailout funds, currently employs some 2,500 staff in Cyprus, and must reduce its payroll by 12 per cent within 2012.
ETYK boss Loizos Hadjicostis later told newsmen the package offered to bank staff was “degrading and unacceptable,” but did not go into details.
He said only a small minority of employees had taken the deal, as a result of which the bank decided to revise the scheme. This proved the scheme lacked “seriousness.”
Asked what would happen should the bank insist on the plan, Hadjicostis said the bank could not do so, as the plan was on a voluntary basis.
“If the employees do not agree to it, then the bank cannot insist. But if there is blackmail and pressure, we have the means to react,” he stressed.
“We call on the [Popular] Bank, if it so wishes, to submit any future plan, but in a serious manner and in writing to the leadership of ETYK,” he added.
The union boss hinted the bank had tried to slip the plan through the back door, for example by not submitting it in writing as it should have done.
As such, ETYK now demands that any future scheme would have to be presented formally to the union and be negotiated with it.
Without naming names, the union boss went on to slam bank officials for leaking to the press rumours that the bank would be massively scaled down. The purpose of these leaks was clearly to “motivate” employees into accepting the early exit scheme, he said.
“All this is aimed at shattering the staff’s confidence in the future of the bank and their own survival, apparently oblivious to the fact that the same [negative] message is being sent to the bank’s customers as well.”
Earlier, a Popular Bank spokesman had said the early retirement scheme concerned 185 employees who would have retired at any point from now until 2017.
Under the plan, they would be entitled to lump sums and some salary benefits, depending on their service. Until recently, bank employees received their provident fund on retirement, which accounted for 78 monthly wages for those with a service of over 36 years.
Some employees were reportedly worried their lump sums would be taxed, depending on the outcome of the government’s negotiations with the troika – the EU delegation in charge of Cyprus’ request for bailout. Until now, they were not taxed and these concerns had led to an increase in employees seeking early retirement.
Meanwhile a group of Bank of Cyprus investors are suing the bank to the tune of €2 million.
A written statement released yesterday by the investors’ lawyers said they are demanding compensation for up to €2 million for damages incurred in the period 1999 to 2012.
The lawsuit is directed at the bank but also top figures including former CEO Andreas Eliades and Solon Triantafyllides former chairman of the board of directors.
Among other things, the bank is being sued for allegedly having made false representations to investors, predatory lending, abusive practices, misrepresentation of financial results and/or outright falsification thereof, including concealment of losses or risk, and exposure of the bank to international speculators.
The island’s largest lender, the Bank of Cyprus is in hot water and could need as much as €700 million in aid.