HSBC and union deadlocked over tax on staff payout as talks drag on
A dispute over whether the payout should be taxed has stalled the deal
HSBC Malta and the bank employees’ union MUBE remain at loggerheads over whether a payout awarded to the bank’s staff members should be taxed, seven weeks after the union first staged a sit-in strike.
In late September, the union kicked off an industrial dispute, arguing staff members were owed nearly €60 million in terminal benefits in view of the bank’s sale to CrediaBank, citing a clause in their collective agreement.
HSBC, on the other hand, argued that the union’s claim had no legal basis and that the collective agreement clause does not apply; the bank will simply be switching hands, rather than closing down, the bank’s lawyers argued, with staff jobs guaranteed for the next two years.
The industrial action was suspended and reinstated on several occasions over the following weeks, as discussions between the two sides progressed, with a deal appearing imminent by mid-October.
However, a month on, the two parties have yet to sign on the dotted line, finding themselves at odds once again.
Sources said the two sides have agreed on a compensation figure, but discussions have stalled over whether employees should be taxed on this amount.
According to sources, the union is arguing that the compensation should be tax-free, as typically happens in cases of job redundancies.
This prospect appears unlikely, however, given that the bank’s sale has ruled out redundancies, with employees set to remain in place.
Sources say HSBC is being asked to up its offer by a handful of millions to cover the income tax that bank employees will be paying on their payout.
This has not gone down well with the bank, which has so far dug in its heels and refused to budge on the agreed figure.
The situation has resulted in an impasse over the past weeks, putting the entire deal at risk and causing frustration within banking and political circles.
Despite several interventions by Finance Minister Clyde Caruana, sources say the two sides have been unable to reach an agreement, with HSBC refusing to budge from its initial position.
When asked about HSBC’s stance, Caruana told Times of Malta “I am quite sure that common sense will prevail, as was the case so far”.
Although the union’s industrial actions remain suspended, it is unclear whether a prolonged stand-off could reignite the strikes held throughout early Autumn.