It is important to highlight that, as Minister for Finance, I have no role to play in negotiations between KBC Group and Bank of Ireland which could see the latter party acquiring substantially all of KBC’s Irish business. Nor do I have a role in approving any deal that may be agreed between the two parties.
Although the State has a 14% minority shareholding in Bank of Ireland, commercial transactions of this nature are the sole responsibility of the Board and management of the bank. The independence of the bank in this regard is protected by the Relationship Framework in place which is a legally binding document that cannot be changed unilaterally. This framework, was insisted upon by the European Commission to protect competition in the Irish market.
Notwithstanding this, whilst the management of staff affairs, including staffing levels, is entirely a matter for KBC and Bank of Ireland were they to acquire the business, I would expect both banks to be very sensitive in relation to the needs and rights of staff and to fully comply with all statutory requirements. In addition, I would expect engagement with staff representative bodies as appropriate.
My Department has been advised by the Department of Enterprise, Trade and Employment that the current Irish law in the area of the “transfer of undertakings” is the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 – S.I. No. 131 of 2003 (TUPE Regulations). The Regulations implement the EU Transfer of Undertakings Directive (EU Directive 2001/23/EC) which is aimed at safeguarding the rights of employees in the event of a transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer (including the assignment or forfeiture of a lease) or merger. Also, section 21 of the Employees (Provision of Information and Consultation) Act 2006 transposed a further provision of the Transfer of Undertakings Directive in relation to the information to be provided by the original employer to the new employer.
The main provisions of the TUPE Regulations provide that all the rights and obligations of an employer under a contract of employment (including terms inserted by collective agreements), other than pension rights, are transferred to the new employer on the transfer of the business or part thereof. The new employer must also continue to observe the terms and conditions of any collective agreements until they expire or are replaced. An employee may not be dismissed by reason of the transfer alone. However, dismissals may take place for economic, technical or organisational reasons involving changes in the workforce. Both the outgoing and incoming employers are obliged to inform their respective employees’ representatives of, inter alia, the reasons for the transfer and the legal, social and economic implications of the transfer. Where there are no representatives, the employers must arrange for the employees to choose representatives for this purpose.
Where an employee considers that a breach of the Regulations has occurred, a complaint may be made to an Adjudication Officer of the Workplace Relations Commission (WRC) and appeals therefrom to the Labour Court.
