Union talks to begin over job cuts at Rock (From The Northern Echo)

Union talks to begin over job cuts at Rock

8:58am Saturday 26th April 2008 in

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CONSULTATIONS with unions over proposed job cuts at Northern Rock could start in the next ten days as the bank prepares to submit its redundancy plans to the Government.

The Northern Echo understands the bank's chairman, Ron Sandler, will deliver the legallyrequired HR1 redundancy form to ministers by the end of next week.

That would trigger a 90-day consultation with unions over job cuts, expected to affect about 2,000 employees, a third of the bank's workforce.

But reports yesterday suggesting that it had been decided the job cuts would happen within three months were dismissed by a Northern Rock spokesman.

He said: "Our business plan stated that a third of jobs would go - most of those within the first year.

"When the HR1 form is submitted, it starts a 90-day consultation period.

"There will be no notification of redundancies or when they will happen until later in that process."

Mr Sandler also refused to be drawn on a timescale for redundancies.

The jobs would go over some period of time'', he said.

He refused to confirm that the HR1 form would be submitted next week, although sources have told the Northern Echo that will be the case.

Mr Sandler said: We are about to start a consultation with the unions - it has not yet begun.

The process will start with a submission to the Government.

It will be submitted when we are ready. It is fairly close.'' A HR1 form is legally required by the Government when a firm proposes redundancies of more than 20 employees.

A task force, the Northern Rock Response Group, has been set up by businesses and local authorities to help people made redundant.

Led by Alan Clarke, chief executive of regional development agency One NorthEast, the group includes Jobcentre Plus, Business Link North-East, The Learning and Skills Council, Northern Rock management, the North-East Chamber of Commerce and the Confederation of British Industry.

The bank was nationalised in February by Chancellor Alistair Darling and Mr Sandler, a City trouble-shooter, was appointed to run it.

Mr Sandler plans the bank to be scaled-down, selling low-risk mortgages and offering savings accounts. The bank will no longer offer unsecured or commercial loans.

It also wants to shed 60 per cent of the mortgages on its books when customer deals run out.

The bank aims to repay its debt to the Bank of England - about £24bn - by the end of 2010, with the aim of becoming a private company again.

Mr Sandler previously said the bank's 78-strong branch network would not be reduced, with the branches being important to its aims of boosting savings deposits.