RE: 1,400 Job Cuts at Bank of Ireland (BOI) - Letter to Minister for Finance
10 August 2020
Dear Minister Donohoe,
I am writing to you regarding the recent announcement by Bank of Ireland (on Wednesday 5th August 2020) to roll out a voluntary redundancy plan with the aim of reducing its staffing levels from 10,400 to below 9,000.
As I am sure you can appreciate, this announcement has sent shockwaves right across the sector at a time of already great uncertainty. It has come as a surprise to customers, staff and their union of choice – the Financial Service Union (FSU) – who were not made aware of this decision in advance, despite representing up to 60% of Bank of Ireland workers.
Moreover, this proposed redundancy plan completely disregards prior engagement by the FSU with the banking sector and agreements reached with other banks for a pause on redundancies during the current emergency. Indeed, Bank of Ireland is an outlier in this sense and this misstep, if not stopped, will inevitably damage the banks long-term standing with the public, customers and broader stakeholders.
Consequently, it is vital that proper and prior consultation takes place between Bank of Ireland management, affected staff and their FSU representatives before any plan is further commenced. I therefore strongly urge you to as a significant shareholder on behalf of the State to use your position to instruct the bank to immediately postpone the proposed voluntary redundancy packages and agree to engage with the FSU at the earliest opportunity to discuss a pause on redundancies for at least a 12-month period.
In addition, can I ask that you commit to the Labour Party proposal for a 12-month moratorium on redundancies from all banks in which the State holds an equity stake and agree to make a clear statement regarding the consequences that Bank of Ireland (and other pillar banks) will face if they continue to act against the public interest during this public health and economic crisis?
The behaviour of Bank of Ireland in this regard and at this critical juncture for our economy risks undermining the impact of many of the positive interventions you and the government have made in terms of support for jobs and businesses in recent months.
I fear that failure to reverse this premature action aimed at frontline staff serving their local communities in the worst of circumstances will result in irreparable reputational damage for the Bank in question and will raise some questions over the Government’s own priorities during this pandemic.
Indeed, such tone-deaf decisions given the current health and economic environment - including the recent breach of the Central Bank's Consumer Protection Code with regard to the unauthorised closure of branches - raises serious questions in relation to the decision-making process at senior management level in Bank of Ireland.
As I am sure you are aware, these decisions may inevitably lead the public, customers and staff to believe that senior management are ruthlessly availing of the COVID-19 crisis as convenient cover to engage in cost-cutting measures and consequent staffing cuts.
At the very least, it risks portraying the bank as totally insensitive to the ongoing struggles of staff and their families at this time, with workers effectively being asked to make a life-changing career decision at a time when many are simply focused on getting their children back to school this coming September.
Notably, this decision shows little solidarity with your government’s recent efforts to retain and restore jobs (i.e. July Stimulus) at a time of unprecedented economic difficulties, despite the fact the State is a major shareholder with a significant equity stake of 14%.
It remains unclear whether you as the Minister for Finance – as the representative of the public shareholding – were made aware of and/or formally approved of their plans for 1,400 voluntary redundancies. I would appreciate if you could clarify in the public interest whether such a notification was sent to you in advance of this decision, and if so, what response was made regarding the matter?[1]
In addition, can you clarify your views on these matters and whether you still retain full confidence in the current CEO, Board and senior management of Bank of Ireland considering their recent decisions?
I duly hope the need for an urgent and adequate response is appreciated given the looming four-week deadline.
Best regards
Ged Nash TD
[1] https://www.gov.ie/en/publication/fc36e6-bank-of-ireland-relationship-framework-march-2012/