Broderick is banking on a miracle
These are dark days for all those working at the coalface of Irish banking. This week, the axe finally fell at AIB, who confirmed 2,500 job losses across the island, with at least 2,200 jobs going in the Republic.
That this long-dreaded announcement has come much later than expected will be cold comfort to those involved, not least because it was originally anticipated that around 2,000 would be let go.
Further salt is being rubbed into the wound by virtue of the Department of Finance’s insistence that the severance terms be pegged back to as little as three weeks’ per year of service plus two weeks’ statutory, bringing severance pay into line with that offered by the HSE to departing staff.
All of which leaves the lead trade unionist representing most AIB employees, Larry Broderick, in a tight corner. The head of the Irish Bank Officials Association must seek to defend his members’ interests against a financial headwind and in circumstances where public sympathy for bank employees is relatively limited.
Broderick and his senior colleagues must negotiate with two pretty hardened characters: non-executive chairman David Hodgkinson and the recently appointed chief executive, Irishman David Duffy.
Hodgkinson earned his spurs as chief operating officer of HSBC, a bank which has emerged pretty unscathed from the banking crisis. Duffy rose to a senior position at ING Barings, where he presided over a jobs shakeout of slightly less monumental proportions to that now under way at AIB.
After his appointment was announced last November, Michael Noonan, the finance minister, said the new chief would be given time to find his feet. Duffy is now off the starting blocks with a venom.
Meanwhile, Broderick and his colleagues have been on the defensive since the full scale of the banking crisis began to emerge at the end of 2008.
The initial predictions from the IBOA chief executive about the scale of job losses has been borne out. In mid-2009, he warned up to 5,000 banking jobs were under threat; 6,000 had gone by the end of 2010. In August 2010, Broderick warned that another 4,000 jobs would go. Once again, it appears his doom-laden prediction will, if anything, be exceeded.
Early on in the crisis, he sought to argue that some of the job cuts being planned were driven by opportunistic senior management. However, the sheer scale of the losses, combined with the loss of our financial sovereignty in Nov 2010, pushed such arguments onto the back burner. Even the IBOA does not now question the need to save on operating costs at a cash-strapped, state-owned entity.
With loan approvals now a tiny fraction of pre-crisis levels, the whole nature of Irish banking has changed — and changed utterly. The demand for staff is greatly reduced as the banks shrink in size by at least 50%.
Broderick and his counterpart at the Unite trade union, Brian Gallagher, are engaged in damage limitation. (Unite represents staff in the EBS and insurers including Aviva.)
This is about getting as many people off the beach intact, under heavy bombardment — an industrial relations version of the great Dunkirk retreat.
The IBOA approach in its dealings with AIB has been to press for the retention of the generous severance payouts that have been the norm in banking.
Prior to the crisis, departing bankers could expect to receive six weeks’ pay per year of service plus statutory — another two weeks — or more. However, with the pillar banks either nationalised or under the state guarantee, the Department of Finance has been exerting its influence.
Broderick will be doing well to achieve for AIB members the four weeks offered to departing Bank of Ireland staff recently.
His main focus will be on ensuring that compulsory redundancies are kept off the table. This has long been an article of faith for the union.
It all must be pretty galling to a union leader who, during the boom, did warn of the dangers of a work culture in banking built around greed. At the time of his appointment as general secretary in 2001, he told Industrial Relations News that excessive links between pay and performance ran the risk of creating the sort of flaws highlighted by Nick Leeson, the man who broke Barings Bank.
“There is a place for selling in a changing environment, but there must be structures in place as there are huge potential pitfalls as became apparent during the DIRT Inquiry,” he said.
In his view, those involved in back-office jobs were considered less valuable than those involved in the sale of products.
Broderick continued to warn of a need for a more ethical approach while at the same time skilfully cobbling together agreements with individual banks.
The union repaired relations with Ulster Bank while entering into a partnership agreement with AIB in 2003, the deal being negotiated under the aegis of trade union chief turned facilitator Phil Flynn. Under this deal, gain sharing was agreed with the bank.
Even during the boom years, the union was on the defensive as traditional defined benefit pension arrangements were diluted and major restructuring of the sector threatened. Ironically, the property bubble delayed a process of restructuring which has now begun to hit home with a vengeance.
Inevitably, the IBOA will emerge from the crisis a much smaller union. New jobs are being created in the IFSC, but this has not proved a happy hunting ground for the union.
Broderick can at least take comfort in the fact that his union would appear to be financially robust, more than can be said for the banks with whom he has negotiated since 1985.
He will continue to press his members’ case, but as many will soon find out, life can be harsh, with the malign outcome of the sins of one’s ‘betters’ being visited upon the innocent working well away from the top floor.
* Age: Early 50s.
* Born: Dublin. Grew up in Crumlin, son of trade unionist.
* Education: B-Comm; Master of Business Studies, UCD.
* Career: Hired by the ITGWU as a 21-year-old union official. Represented workers in the Rank flour mill dispute in Dublin/Limerick, some of whom went to jail.
*1985: Joined IBOA as assistant to general secretary, Job Stott, with task of recruiting new members.
*1992: Bank strike leads to loss of many IBOA members.
* 2001: Succeeds Ciaran Ryan as general secretary.
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