Lloyds could have put on hold until next year many of the 865 redundancies in Insurance and Wealth, Retail, Finance and Commercial Banking it announced on Wednesday. Lloyds is not like many of the businesses that have announced redundancies recently. It will still be around for many years to come and has received massive support from the UK taxpayer in the past. Adding to the unemployment numbers is not what UK taxpayers expect from the banks they saved. LBG has a responsibility to the wider economy and the fact that these redundancies are, to quote Mr. Sinnott: “the result of existing restructuring plans from before the pandemic that were put on pause” is irrelevant. All plans, existing or otherwise, should be put on pause until this pandemic is over. That’s the very least the taxpayer can expect.

To throw hardworking staff on the scrap heap in the middle of a pandemic and against the backdrop of the worst financial crisis in a generation is nothing short of scandalous. How does such action ‘Help Britain Prosper”? It doesn’t, but then again we always knew that strapline is just a bit of marketing guff.

At the same time as announcing another round of redundancies the bank took the opportunity to say the redundancy terms will be retained until 2023. We understand that Mr Sinnott is new to the role but the redundancy terms for Lloyds heritage staff form part of their contact of employment and as such don’t need to be retained. There is no end date for those terms. The position for heritage HBOS staff is different because, ever helpful to the Bank, Accord specifically agreed the terms were not contractual. That said, Lloyds Banking Group has never once proposed, even during the harmonisation of terms and conditions, to get rid of the any of the redundancy terms but Accord likes to give the impression every few years that the terms have been saved. It’s quite sad really or rather would be if it wasn’t dishonest. In 2023 the HBOS redundancy terms will be extended again. You read it first here.

The Group is already boasting that it expects to deliver operating costs of less than £7.6bn by the end of 2020. What that means is that over the next few months we can expect to see more reorganisations, with more middle management jobs going and job insecurity hard-wired into Lloyds Banking Group for those that remain. And that at a time when we can expect to be going through a second wave of the Covid pandemic.

We have said this before but the Group should publish how many staff it is going to need over the next few years and should open up voluntary severance registers for each division. The Bank can then identify the jobs that are going with the staff that want to leave. Staff that want to stay should be offered retraining and guaranteed new jobs on their existing terms and conditions.

Redundancy Terms

The first stage of calculating entitlement involves working out an individual’s weekly earnings upon which Redundancy Payments would be based. The total pay figure is then divided by 52 to arrive at a weekly figure.

The formula for calculating Pre 2012 Severance Pay is 2 weeks’ pay for every year of service under age 22, 4 weeks’ pay for ever year of service aged 22 to 40, 6 weeks’ pay for every year of service aged 41 and over. Only the last 20 years service is used in the calculation and payment is capped at a maximum of 104 weeks’ pay.

The first £30,000 of any Redundancy Payment is paid tax-free. Severance payments apply to all staff. Payment is based on each individual’s length of service in the Bank, up to the date of termination rounded up to whole years based on age at last birthday. For example, service of 12 years 1 month at date of leaving would be rounded up to 13 years.

For those staff who joined the Bank after 1st January 2012 the severance terms are calculated differently. For each year of service under the age of 22 staff get 1.375 weeks’ pay per year of service. Between the ages of 22-40 staff get 2.75 weeks’ pay per year of service and 4.125 weeks’ pay per year of service over the age of 41. Service is rounded down to the nearest whole number of years and takes account of age as at the last birthday.

The total value of any payment under these terms is capped at £165,000.

Members with any questions on the latest round of job losses should contact the Union’s Advice Team on 01234 262868 (Option 1).

The results of the union’s survey can be found here.

Lloyds has said that because of the changes to the way it works it will need fewer buildings/offices. The Chief Executive of WPP, the advertising giant, said that more home working would save the firm £650 million a year on office space. RBS has told 50,000 of its staff that the majority of them would continue to work from home until early 2021. The bank should be cautious of any deadline and there should be no mad rush to get staff back to offices without first asking them what they want to do.

Members should expect to see some fundamental changes to way they work and where they work in the future. In a recent article on home working, the Economist said: “The pandemic has made remote working both normal and acceptable. In the past employees who stayed at home had to overcome the suspicion that they were bunking off. Now those insisting on being at the office sound self-important. For more than a century workers have stuffed themselves onto crowded trains and buses, or endured traffic jams, to get into the office, and back, five days a week. Far the past two months they have not had to commute, and will have enjoyed the hiatus”. Interestingly, The Office for Budget Responsibility said that the amount of income households put aside rather than consume, jumped from 5% in February to 30% at the height of the pandemic. As our research showed, many Lloyds staff working from home are making significant savings on train fares, lunches, coffees and entertainment after work.

But the current new normal is not a Utopia for everyone. Some 38% of workers said that it is harder to strike a work-life balance when working from home. And we know there are some members who are desperate to get back to the office.

We will be reviewing potential changes, which we hope will be a mixed model with more home working for staff who want it, and we will cover those in more detail in future Newsletters.

In the meantime, members with any comments or issues they would like us to deal with should contact the Union’s Advice Team on 01234 262868 (choose Option 1).

Treating Vulnerable Customers Fairly?

The real economic consequences of the Covid-19 pandemic on individuals will only become apparent once the Government’s furlough schemes and support for the self-employed come to an end. More than 12 million workers are being supported by those schemes. Economists are predicting that unemployment could reach levels not seen since the mid-1980s.

In anticipation of the impending surge in unemployment, Lloyds is proposing to set up a Financial Assistance Team, across all three brands, with the aim of helping individual households deal with the consequences of financial hardship. It’s a good idea.

The bank expects there to be lower levels of banking activity in branches for the foreseeable future and it is proposing to second 900 Banking Consultants and 100 Bank Managers to this new team for up to 18 months. Those Banking Consultants and Bank Managers will work from home offering financial assistance to customers. For those staff wanting to develop new skills that will offer future opportunities to move on in the bank, the new roles are certainly worth considering. The bank will be expecting seconded staff to work flexible hours throughout the week.

So far, so good. The bank is not offering this new service out of altruism but because it knows that a savage recession will lead to huge loan losses as individuals and small businesses suffer. In her message to staff, Jo Harris, Managing Director of Lloyds Community Bank, kept referring to the achievement of performance metrics for this new team and that raises a number of important questions; most importantly: how is individual performance going to be measured? We have been here before with Lloyds. What starts off with the best of intentions quickly turns into a performance free for all, with staff pressurised to hit targets and individuals pursued to disciplinaries. In June, Lloyds was fined £64 million for failing to treat over a quarter of a million mortgage customers in arrears fairly. The FCA said: “’Banks are required to treat customers fairly, even when those customers are in financial difficulties or are having trouble meeting their obligations. By not sufficiently understanding their customers’ circumstances the banks risked treating unfairly more than a quarter of a million customers in mortgage arrears, over several years. In some cases, customers were treated unfairly, including vulnerable customers. Customers should still pay what is owed, but banks are obliged to treat their customers fairly when making new payment arrangements”.

We hope the bank has learned the lessons of the past. We will review the bank’s performance criteria for these new roles once they available and any attempt to pressurise staff to pressurise vulnerable customers will result in an immediate referral to the FCA.

In the meantime, members with any comments or issues they would like us to deal with should contact the Union’s Advice Team on 01234 262868 (choose Option 1).

 

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