Irish Life and Permanent has formally completed its #430 million (£339 million) takeover of TSB Bank with the signing of a ministerial order by the Minister for Finance, Mr McCreevy. But an Irish Permanent proposal to harmonise the terms and working conditions of its 1,336 staff with those of TSB employees has been rejected by Irish Permanent employees.
The rejection, in a ballot this week, will mean that the merged bank will have two sets of employees with different working conditions, including weekly working hours.
The proposal, recommended for acceptance by the MSF union, involved setting up an employee share option plan partly funded through costs savings to the company from an increase in working hours and changes in some conditions. Clerical employees rejected the proposal by two to one in a ballot while management staff accepted it in the same proportions. An I&LP spokesman said the company had no plans to renegotiate. "The employees have chosen to maintain their current terms and conditions and we have no pressing business need to make a change," he said.
TSB employees benefited from the sale of the bank through the setting-up of an Employee Share Option Trust which gives them a 15 per cent share of the sale proceeds. The Government will get #365.5 million from the sale of TSB while the remaining #64.5 million will be shared between TSB's 1,300 staff through the ESOT.
About 80 per cent of TSB staff are entitled to some £40,000 each in shares. But staff will have to wait until 2003 to sell their first tranche of ESOT shares which is capped at £10,000 each. Under the terms of the takeover TSB staff are protected from compulsory redundancy for a two-year period. Irish Life plans to merge the business of TSB with its existing Irish Permanent banking operation over the next 12 months. The separate brands will be maintained until the merger of back office functions has been completed.
Permanent TSB will have total assets of #15.9 billion including mortgage loans of #9.1 billion, including securitised mortgages. TSB chief executive Mr Harry Lorton is chief executive of Permanent TSB while Irish Permanent chief executive Mr Diarmuid Bradley is the deputy chief executive and chief operating officer. Mr Lorton and TSB trustee Mr Barry Sheehan have been appointed to the board of Irish Life and Permanent.
