The Bank of Ireland has signed a £348m IT outsourcing contract with Hewlett-Packard after seven months of negotiations with staff and union leaders.
HP will manage Bank of Ireland’s IT infrastructure, including desktops, servers, local-area networks and mainframes, under the deal. Around 350 staff in Ireland and 145 UK-based staff will transfer to the supplier.
Plans for the outsourcing agreement were first announced in April, when HP was named as preferred supplier.
However, the proposed deal met with opposition from staff unions and the outsourcing went ahead after a 24-hour strike in August and protracted negotiations. The staff who have been transferred eventually won a five-year job security guarantee and a £3,500 payment each.
Phil Morris, director of outsourcing advisory firm Morgan Chambers, said the unusually protracted negotiations highlighted the need for IT directors in the UK to be aware of how European legislation relating to outsourcing can be interpreted.
"In Ireland, the Acquired Rights Directive [European Human Resources legislation enacted as Transfer of Undertakings Employment Protection in the UK], outsourcing is deemed to be a company sale rather than a service contract as it would be in the UK. Outsourcing is viewed differently in Ireland."
He added that the difficult faced by Bank of Ireland in finalising the deal was an example of a general scepticism about outsourcing in the financial services and banking sector in continental Europe.
"Outsourcing is unpopular with financial services firms in Europe," he said. "Staff don’t like it and many companies don’t see the benefit."