From Socialist Voice, July 2008

The harder you work the less you get

In 2005 Bank of Ireland sought to introduce a number of cost-saving schemes, including voluntary redundancies, to maximise its share of the market. The Irish Bank Officials’ Association negotiated a deal with Bank of Ireland, called the strategic transformation programme, whereby employees would co-operate with changes and in return receive a 6 per cent profit share for each of the four years of the scheme.
     Having abided by the agreement for the first two years, the senior management of Bank of Ireland this year decided not to pay the full 6 per cent and instead pay only half, despite the bank having a record profit last year of €1.7 billion after tax—an increase of 6 per cent on the previous year—and the STP delivering annualised cost savings of €147 million a year.
     The employees of Bank of Ireland have created all this profit and in return have had their share cut in what an independent mediator and author of the original scheme agreed (despite refusing to issue a binding recommendation) was a breach of the agreement by the bank.
     What is the bank’s argument? On top of the usual “global economic situation,” Bank of Ireland claims that employees did not meet the projected growth rates for this year. These rates, however, were set on the back of employees producing an unprecedented previous-year growth and meeting all the requirements of the STP a year early. The message is that the harder you work the more unachievable the targets set and therefore the less you will earn.
     Before the STP, in 2001, the bank made a profit of €802 million and employees received 3½ per cent profit share. The bank now expects employees—despite a profit of €1.7 billion—to take a profit share of only 3 per cent.
     IBOA members have been outraged by this case of blatant profiteering and contempt for their union by the bank and so have pushed for action on many fronts. For Bank of Ireland to pay the full 6 per cent, as agreed, would cost it a mere additional €20 million—that is, just over 1 per cent of last year’s record profit!
     At the time of writing, the IBOA had just balloted its members for industrial action and had received an overwhelming mandate—91 per cent of those balloted—for action to have the full 6 per cent paid and agreements lived up to. The other unions in Bank of Ireland, Unite and SIPTU, are following IBOA’s lead by balloting their members.
     While this issue of profit share is extremely important—to the value of €3,500 or thereabouts for most employees—it is also the last straw for IBOA members. It follows the bank’s attempt to impose a poor pension scheme for new employees, without consultation or agreement with the IBOA, the downgrading of appraisal ratings, costing employees money (or saving money for the bank), pay increases less than inflation, refusal to improve pay scales in Banking 365, lack of promotional opportunities, and in general an unreasonable approach to sales and targets.
     Why would the bank risk industrial action, with all its consequences for employees and customers, for the sake of €20 million—a drop in the ocean of its profits? Banks are not answerable to their employees, nor are they answerable to their customers. They are answerable, however, to their shareholders. Large shareholders generally do not care what industry or business they are in so long as the money they invest gets a good return. They jump from banking to forestry to arms manufacturing in pursuit of profits and so have no interest in or care for employees or for services provided to customers.
     What is important for shareholders, and for the economic system based upon this, is the rate of profit: that is, the percentage return they will receive on their investment. Therefore, no matter how much money Bank of Ireland makes it must continue to exploit its employees to maximise the rate of profit for its shareholders in order for the bank to hold on to its shareholders and make sure they don’t find a better rate elsewhere.
     It is this system that forces institutions, and even more so in times of great success, to squeeze every ounce of work out of their employees and pay them as little as possible to ensure the maximum exploitation of their labour.
     Unions have a responsibility and a mandate from their members to fight for better terms and conditions and to achieve better pay for their members. To do this, logically, they are forced to cut into the profits of shareholders; and this is the great conflict of interest and great struggle between labour and capital that is on display in the case of Bank of Ireland and the IBOA.

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