What Price Failure?
You almost ruin TSB, shred its reputation, destroy the brand, cause an avalanche of customer complaints, lose £176 million+, put your staff through the shredder for months and you walk away with £1.7 million. That’s the price of failure in TSB.
When asked about Mr. Pester’s departure from TSB during a session of the Treasury Select Committee yesterday, Mark Carney, Governor of the Bank of England said:
“Responsibility has now been taken by the chief executive for a series of quite fundamental failings that have disadvantaged a very large number of customers and affected confidence in the institution [Affinity emphasis]. We look forward to a new team being put in place.”
TSB’s policy on executive pay couldn’t be clearer: “Severance payments are paid in line with the principle of ‘no reward for failure”. Can you imagine any other member of staff in TSB being given the opportunity to walk away from being held to account for their actions and with a payment in lieu of notice? The fact is Mr Pester should have been held personally responsible for his actions before and after the IT meltdown. If the independent investigation being undertaken by Slaughter and May blames the IT meltdown on the actions of Mr. Pester, either wholly or in part, there is nothing the Bank can do to recover £1.2 million they will have already paid him. Mr. Pester should have been subject to the Bank’s Disciplinary Policy like any other member of staff and if found guilty, should have been dismissed without notice. The £1.2 million saved by the Bank could have been used to fund bonuses for those staff that have had to clear up the mess created by the IT meltdown.
It was supposed to be so different. TSB was supposed to mark a break from the past and offer a different kind of banking. Instead, it’s turned out to be exactly the same.
And if things couldn’t get any worse, Richard Meddings, the Executive Chairman of TSB, who will be running the Bank until a new CEO can be found, compounded the Bank’s problems by writing to the Rt Hon Nicky Morgan MP and addressing the letter “Dear Morgan” and dating the letter “4 September 2019”. One commentator pointed out “It was the first time that TSB’s computer system had not been stuck in the past”.
Are The Severance Terms Contractual?
This issue of whether the Bank’s severance terms are contractual or not is important because once the dust settles after the IT meltdown, we expect the Bank will start to cut costs aggressively and that will almost certainly mean job losses and more branch closures. In a previous Newsletter we said: “..we are aware of mutterings that TSB is planning to do away with the enhanced severance terms for heritage Lloyds TSB and HBOS staff.” TSB recently confirmed that the Job Security Policy, including the enhanced severance terms for heritage Lloyds TSB staff, were contractual.
The Union will be writing to members in the next few days enclosing a letter for them to send to the Bank asking it to confirm the legal position on this important issue. It’s important that members send those letters immediately.
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