Lloyds Banking Group is to stop recognising the trade union membership of some senior employees by replacing union negotiations with so-called “people forums”.
The FTSE 100 lender, which has around 60,000 employees, told staff in a memo last month that it had “agreed new arrangements” with the Unite and Accord unions that will take effect from January.
Lloyds said the move will change how it consults with staff on issues like job cuts, pay and policies. Its higher-paid employees will have access to three new “colleague forums to replace our current collective union agreement”, the bank said.
The “people forum” will comprise 16 unelected members who management will consult on “strategic matters related to our business”.
Lloyds will also introduce a “people consultation forum” with 28 elected staff focusing on issues including health and safety and pension plans, as well as a “Management Advisory Forum” of 17 elected members to give feedback to management.
The changes come as the UK’s biggest retail bank embarks on a five-year plan launched in 2022 to invest £4bn to diversify away from interest rate-sensitive income streams like mortgages and become a “digital leader”.
As part of efforts to boost returns, Lloyds has cut hundreds of jobs across its branch network and reviewed some 2,500 mainly back office jobs last year.
The bank said its changes to union negotiations will affect staff in higher-paid jobs in “grades D-G”, of which 80 per cent are not members of either union. A person familiar with the matter said these are more senior roles but not executive level.
A company spokesperson told City AM the changes were designed “to meet our customers’ ever evolving needs” and that Lloyds was “following industry best practice”.
Several other major banks already have similar arrangements in place, a person with knowledge of the matter said.
Lloyds said it was “working collaboratively with Accord and Unite to implement these new arrangements” and that the changes would help the group “continue to be an enjoyable, highly productive and rewarding place to work”.
Union membership density has fallen in recent times due to acquisitions, branch closures and recruitment in from the tech sector, Accord general secretary Ged Nichols told the Financial Times, which first reported the changes.
Still, Nichols said union membership is high among the lower grades of Lloyds and “not insignificant in other grades”.
“Independent trade unions can provide more for employees than employer led forums will ever be able to,” he added.