Agreements at BSCH and Banesto protect workers in merger

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The formation by merger of the Banco Santander Central Hispano (BSCH) in Spain has finally ended with an agreement on employment following tough negotiations. Meanwhile, on 11 March 1999, trade unions and management at Banesto, a linked company, reached a provisional agreement on the procedures for guaranteeing employment, similar to the one signed at BSCH in early March.

The merger of the Spanish banks Banco Santander and Banco Central Hispano to form Banco Santander Central Hispano (BSCH) (ES9902104N) was completed on 3 March 1999 when an agreement on employment was signed affecting the workforces of the two merging banks. The aim of the agreement is that the merger should not harm, worsen or alter the security of employees in either bank. A commitment has been made not to use draconian measures during the internal reorganisation that must be carried out at BSCH as a consequence of the merger.

In short, the management of the bank has agreed that there will be no redundancies or "termination of contracts for technical, economic or organisational reasons or for reasons of production". It has also agreed to introduce a process of convergence towards a common personnel policy. This will award a special bonus in the form of company shares in three stages (a point that the company had opposed during negotiations) and guarantee equal opportunities and non-discrimination in promotion and careers.

This agreement at BSCH did not make specific mention of employees at Banesto- a bank linked to Banco Santander - but did advise the companies across the group to draw up and sign a document similar to the one agreed in the parent company. As a result, trade union representatives and the management of Banesto held a further meeting to reach a similar agreement. The aim of the unions was that the employment guarantee covering workers in the principal bank should be extended to those at Banesto. This issue had in fact been the most controversial one during the recent negotiations over the agreement at BSCH.

Finally, on 11 March Banesto and the unions signed a provisional agreement similar to that at BSCH. Under its terms, Banesto will not declare redundancies or force workers to relocate. It will also not dismiss individual workers for organisational reasons - a point of dispute during the negotiations - because this was not included in the proposal that management had presented.

Management at Banesto also acceded to two union demands that could involve costs of up to ESP 120,000 per worker. The agreement includes a one-off payment in compensation for the merger similar to the one that the employees of BSCH will receive. The details of this compensation, including the exact amount, have not yet been finalised. Banesto also agreed to update the social benefit payments of the workers. The trade unions said that they were "very satisfied" with the agreement.