The trade union representing 40,000 workers at Lloyds Banking Group has launched breach-of-contract claims against the bank for 16,500 of them including group IT staff.
The bank asked 50,000 staff members to sign new contracts with new terms and conditions by 15 October 2010. It told staff that if they did not sign the contracts they would receive no pay rises or promotion.
The Lloyds Trade Union (LTU) had not agreed the new terms and conditions. It said many members would be worse off.
The union is unhappy with a number of clauses, including one concerning working hours and another enabling the bank to vary terms and conditions at any time, said Mark Brown, general secretary of the LTU.
"The bank is trying to bully, economically intimidate and browbeat staff into signing the new contracts and we will not stand by and allow that to happen. However, despite the best efforts of the bank what is all too clear is that staff are still saying that they are not going to sign the new contracts of employment," said Brown.
Lloyds Banking Group has been the target of much criticism in the past for its handling off IT staff. In 2009 union Unite described the bank's offshoring of IT jobs as "death by a thousand cuts." Later that year the group sent letters to IT contractors revealing that their pay wass being cut by 15% and giving them the choice to accept the offer or leave.