Bank of Ireland sells 500 IT staff to HP

Bank of Ireland has said that no job losses are anticipated as the result of a major outsourcing deal it is negotiating with HP.

Bank of Ireland announced on Friday that it was in exclusive discussions with HP about appointing it as the bank's supplier of IT services for the next seven years. The move will likely lead to the transferring of more than 500 Bank of Ireland IT staff to HP.

Bank of Ireland said the workers will operate in HP under the same terms and conditions as they had when they worked directly for the bank.

The vast majority of the workers to be moved are in the bank's wholly-owned ITSIS (IT Systems and Infrastructure Services) subsidiary in Dublin. Other employees in the UK and Northern Ireland dealing with back-office issues will also be affected.

The deal follows an attempt last year by Bank of Ireland and AIB to merge their IT support divisions. The joint venture was abandoned after the European Commission said it wanted to extend its investigation into the proposal. The venture would have employed around 700 people and saved both banks an estimated EUR19 million each a year.

Following the failure of the merger, Bank of Ireland said it would consider other joint venture possibilities, perhaps with non-financial services companies.

A spokesperson for Bank of Ireland said the deal with HP would be simply an outsourcing arrangement and was not a joint venture. However, it would cover the same scope as the proposed AIB arrangement in that it will not only cover operations in the Republic of Ireland, but Northern Ireland and the UK as well.

It is certain that this development will cause concern in employees' representative organisations such as the Irish Bank Officials Association (IBOA).

The IBOA said in November that it was "surprised and very disappointed" to learn of Bank of Ireland's plan to outsource some of its IT functions when the bank released its IT Consolidation Review.

The IBOA said it had discussed the question of job losses with the bank in the past, but claimed that the bank had never proposed the idea of outsourcing.

Then in January, IBOA said its members in Bank of Ireland's IT operations had rejected the outsourcing proposal and it called for the Tanaiste and Minister for Trade, Enterprise and Employment, Mary Harney, TD, to intervene to ensure that all IT functions stayed within the Bank of Ireland.

"It is totally unacceptable that an organisation like Bank of Ireland, earning massive profits in excess of EUR1 billion per annum...should treat its IT staff's future with such disregard," said the IBOA's General Secretary, Larry Broderick at the time.

The union said it was concerned about the "inadequacy of commitments made to them (staff) in terms of job security and the preservation of terms and conditions in the medium-term future" resulting from outsourcing.

Larry Broderick told ElectricNews.Net that the union would ballot its members in Bank of Ireland's IT departments over industrial action. He said this was necessary because the union and many of its members were unhappy that the deal had progressed to date without the input of staff, and it was concerned about the long-term future of these jobs.

He said strike action could be averted if staff agree to the final deal between Bank of Ireland and HP. The ballot is due to be completed by April 15 2003.

Bank of Ireland does not believe that the IBOA has grounds for concerns about the eventual deal. "Both Bank of Ireland and HP will meet with representative organisations before the negotiations are completed," a spokesperson said.

Bank of Ireland said it will take between four and six months to conclude the deal. © ENN