In response to a straightforward question on compensation for the loss of final salary pensions from a member of staff being transferred to Schroders, Kellie Spencer-Witcomb said, in a piece of world-class gobbledygook that: “Each colleague transfer is reviewed individually, looking at total impact for colleagues and it was not appropriate for this transfer”. However, when asked to justify that statement and explain why staff transferring to Schroders were being treated differently to those staff that transferred to TSB, or even IBM, there was silence.
It’s no good Lloyds offering staff the opportunity to ask questions and raise issues but then decline to answer them when it gets too difficult. Staff are entitled to an answer and Ms. Spencer-Witcomb should provide one – in simple English. If she doesn’t, then staff are entitled to conclude that there was no individual review, and it’s a case of Lloyds getting away with one of the cheapest TUPE transfers on record. But that’s not enough for the bank, we are aware that it is trying to clawback the 3% pension payments before staff have even received them. Those staff in a defined benefit scheme who were under paid relative to the market and will get an uplift to the new minimum salary have been told that they will get the 3% first, then the salary uplift. So, the 3% will be lost because the bank has deliberately chosen a method of sequencing the increases to save itself a few pounds. The salary increase should come first, so everyone is being treated equally, and the 3%, which is compensation for the fact that staff are moving from a non-contributory DB scheme to a contributory DC scheme, should be applied last. Staff are being taken advantage of by Schroders and the business is not even up and running yet. How Accord could agree to that sequencing of payments is beyond us. Can you imagine what the HR will do once staff have moved to the business officially!
Protecting The Enhanced Severance Terms
In recent years, we have dealt with a number of cases where members were transferred under TUPE from employers to other companies
Subsequently, attempts were made to make these staff redundant on the statutory terms only and not in accordance with the enhanced redundancy terms which they carried with them under their TUPE transfers. This would have reduced their redundancy payments; in some cases from around £20,000 to approximately £5,000 each.
This issue went right to the heart of whether or not their original enhanced severance terms were a contractual right, when we were sure they were. By failing to pay staff in accordance with their enhanced severance terms, the new employers had breached their contracts of employment.
All the cases were resolved eventually but the preparedness of employers to try to get away with short-changing staff on their severance payments has been shocking.
In the case of Lloyds’ severance terms all the evidence, including what the Bank has said to staff, suggests the terms are a contractual right.
There are no guarantees that Schroders Personal Wealth will succeed or that they won’t try and reduce staff numbers at some future stage. We all want the new company to be a success but in the event it’s not, members need all the protection they can get. Imagine how you would feel being offered a redundancy payment of £5,000 when you are entitled to £20,000? And let’s face it, the two bank-approved and sponsored unions – who by doing nothing have agreed to the Schroder transfer terms – can’t be trusted to look after your interests. When push comes to shove both unions will be the first to head for the hills. In order to protect their legal positions, members should write to James Rainbow, Chief Executive, Schroders Personal Wealth, making it clear that the Lloyds Bank enhanced severance terms are contractual and they expect them to be honoured in all circumstances. He won’t respond, but that’s not important. What’s important is that you have set down a legal marker which can’t be removed. Our suggested letter will be sent to members in the next few days.
Members with any questions on the latest round of job losses should contact the Union’s Advice Team on 01234 262868 (Option 1).