The end of the golden age of banking: ERE more numerous and with worse conditions

The CaixaBank unions regret the “devastating” conditions put on the table by the entity at the beginning of the negotiations.

This is how the new CaixaBank looks at the old Bankia headquarters in Madrid and Valencia

The early retirement of Spanish banks are increasingly moving away from the attractive image they had just a few years ago. The Records of Employment Regulation (ERE) that the entities put in place affect more and more workers and offer worse conditions, while opening the door to younger and younger employees.

A decade ago it was easy to see a bank or savings bank offering more than 80% of the pensionable salary to employees who wanted to retire early through a collective dismissal procedure, which used to have an age limit of around 55 years .

An example is the ERE that CajAstur, now Liberbank, launched in 2010, in which it offered between 90% and 95% of salary as compensation to early retirees, which were about 2,200.

That same year, Caixa Galicia and Caixanova, now Abanca and Evo Banco, agreed to leave some 1,200 workers over 55 years of age with 85% of the fixed salary. Bench of the Sea (BMN), which has ended up integrated into CaixaBank, for its part, agreed to some 150 withdrawals in 2012 with compensation of up to 45 days per year worked.

At present, however, severance payments and compensation are getting worse and worse and are more in the vicinity of 60% of salary. The ERE in recent years are also characterized by opening the door to early retirement to employees much younger than before, reaching up to 50 years of age, apart from the incentives for the rest of the workforce.

20 days per year worked

These patterns are repeated again in the numerous collective redundancy procedures that several banks are currently negotiating or have just closed as a result of the pandemic and digitization. In the first group is CaixaBank, the last to publicize the economic conditions it intends to apply, which have outraged the unions.

The bank’s initial proposal is to close 1,534 offices (-27%) and reduce the workforce by 8,291 workers (-18%) with conditions that are far from being to the liking of the workers’ representatives. Specifically, for employees aged 63 or over (as of December 31 of this year) a compensation of twenty days of salary per year worked with a ceiling of twelve monthly payments.

For those between 58 and 63 years old with a seniority of more than fifteen, the payment of the 50% of the regulatory salary (the one that the worker receives at the time of termination) up to age 63 and payment of the special Social Security agreement (without revaluation) until that date, with the unemployment discount.

For workers of the following age range, between 55 and 58 years old with more than fifteen years of service to the entity, 50% of the regulatory salary multiplied by four is offered. Finally, the rest of the workers will be able to opt for a compensation of 25 days of regulatory salary per year with a ceiling of 18 monthly payments.

José Ignacio Goirigolzarri and Gonzalo Gortázar.  EE

José Ignacio Goirigolzarri and Gonzalo Gortázar. EE

“Everything that has been raised has been devastating. The conditions are shameful “a union source that is part of the negotiating table explains to Invertia.

From CCOO they criticize that it is “Demolition conditions” and that the compensations for voluntary departures are lower than those of the ERE that the entity itself launched in 2019. Not surprisingly, less than two years ago CaixaBank reached an agreement with the unions for the voluntary departure of up to 2,023 employees and with indemnities of 57% plus premiums and without discount for unemployment.

8,000 jobs in four years

In the case of other banks, the evolution has been similar. Santander has also gone through various collective dismissal procedures in recent years, especially after the integration of Popular. In 2017, it agreed to an ERE for about 1,000 employees with severance pay for up to 80% of the pensionable salary.

Two years later, it dispensed with another 3,223 workers with severance pay of between 60% and 80% and last December agreed to another cut of 3,572 jobs with severance pay between 65% and 73%.

Long before considering the merger with CaixaBank, in 2018, Bankia carried out a collective dismissal process to resize its workforce after the integration of BMN, which affected 2,000 employees, who were compensated with up to 63% of their salary.

The lower compensations and the greater number of affected people now include the obligation to join the ERE. In the case of CaixaBank, the management has informed the unions that voluntariness will be prioritized, but the bank reserves the option of resorting to forced dismissals if there are several situations.

Among them is the possibility that the surplus has been reached for each functional and territorial area, while the bank requires that half of those assigned to the ERE are less than 50 years old to “avoid a generational imbalance.” The entity, according to its initial proposal, may also reject a request to join the ERE when “the maintenance of the person in the entity is necessary”.

Mergers are the main source of bank job destruction, but not the only one. More and more banks are looking to improve their efficiency in a context in which their profitability is undermined by low rates and digitization is changing the way they interact with their customers and, above all, is calling into question the role of the branches, which receive fewer and fewer visits.

As a result, by the end of 2021, banks will have cut some 110,000 jobs compared to the workforce they had in 2008, when the number of bank employees reached the all-time high. Only in the last ten years the cut is close to 40%, a process that does not seem to be slowing down anytime soon.