Unions probe legality of BOSI's staff transfer plans
TRADE unions are questioning the legality of Bank of Scotland (Ireland) plans to transfer almost 800 staff to a new "independent" services company.
The embattled bank wants to use "transfer of undertakings" laws to compel the workers to move to a new company that will run down BOSI's €32bn loan book. Under the transfer of undertakings rules, staff who refuse to move to the new company are considered to have declined alternative employment and are therefore not entitled to redundancy payments.
Brian Gallagher, of trade union UNITE, said his organisation was taking legal advice on whether the transfer of undertakings rules could actually be applied to BOSI's plan.
"We're exploring options as to whether this is a valid transfer of undertakings," he confirmed. "The issue is whether their roles are actually transferring; you could argue that their role now is in banking; working in a debt collection agency is not our role. We're seeking legal advice on that."
BOSI's spokesman said the bank was "very" confident the transfer of undertakings rules did apply to its plan. "We wouldn't have announced it if we weren't very certain."
Asked if BOSI had taken formal legal advice on the plan, he replied: "Yes, that is correct."
Mr Gallagher said UNITE was also seeking a meeting with BOSI's London-based parent Lloyds Banking Group to discuss progress in establishing the proposed independent services company.
BOSI's existing management team, led by chief executive Joe Higgins, is vying to run the new company, but a number of other bidders are also understood to have come forward.
"We need to get a handle on who else is looking at it and we're not going to get that from local management," Mr Gallagher said.
A spokeswoman for Lloyds declined to comment on the possible meeting. UNITE has spent recent days meeting with members across BOSI's workforce as the impact of last week's announcement sinks in. "[The mood is] anger," Mr Gallagher said. "They feel let down."
BOSI let go 750 people when it axed its Halifax retail network earlier in the year.
BOSI insisted it was committed to maintaining a business bank as recently as February, before a strategic review triggered the decision to close.