Some UK finance firms mis-using 'key worker' status - union

* Some employers still yet to dial down to minimal staffing-union

* Only a limited number of people shld be "key workers"-watchdog

* Banks stepping up protections in call centres, branches

* Some staffers ditching home-working by choice

By Sinead Cruise and Huw Jones

LONDON, April 1 (Reuters) - Some financial firms are defining an unnecessarily large proportion of staff as "key workers" to ensure they can still come into the office or branch to work, according to a union representing thousands of bank employees.

Together with healthcare workers, supermarket employees and delivery drivers, bank staff deemed vital to the stability of the UK economy have been granted freedoms to travel to their workplaces, under terms of a lockdown which began on March 20.

Some employers have applied the special status excessively across their workforces, increasing risks to staff health, according to the Unite union whose membership includes bank branch employees and call centre workers.

"Unite cannot condone the generalisation of the "key worker status"," Dominic Hook, national officer at Unite, said.

"There can be no operating a "business as usual" model and the industry must heed the government measures to enforce social distancing and isolation."

Britain's Financial Conduct Authority (FCA) declined to comment.

Last week, the FCA warned banks that only a limited number of people should be designated as "key workers" not only to minimise infections but also ease the burden on schools, which remain open to children of such staffers.

The regulator said financial services employees who are able to securely trade shares and other financial instruments from home should not be required to travel into work and it said that CEOs of banks would be directly accountable for ensuring they have a proper process for designating individuals as "key workers".

Industry trade group UK Finance did not immediately respond to a request for comment.

Barclays, HSBC, Royal Bank of Scotland and Lloyds have reduced the opening hours of many branches and have encouraged customers to bank online to reduce strain on frontline staff, many of whom now work behind plastic screens and run queuing systems to minimise exposure.

"We have put in place homeworking arrangements for our colleagues where it is possible to do so and social distancing measures in the workplace where homeworking is not possible," a spokesman for HSBC said.

Call centre staff unable to work from home are working at safe distances from colleagues in premises that are regularly deep-cleaned, financial industry sources said, without quantifying how many or what proportion of their workforces have been classed as "key workers".

Trading floors and investment banking operations were running with the smallest numbers of office-based staff possible to meet regulatory requirements, the sources added, without quantifying how many or what proportion of their workforces still come into the office.

"The health and wellbeing of colleagues and customers is our priority, and we continue to follow UK government advice to ensure everyone remains safe," a spokeswoman for Lloyds said, echoing similar statements from Barclays and Royal Bank of Scotland.

One currencies analyst at a large bank estimated 20% of staff on his floor were in the London office, including several from research.

The bank had given those staff the option to work from home, but the analyst decided to come in after two frustrating weeks of working from home.

"It’s just easier to be here," the analyst said, declining to be named.

Some lawyers warned banks needed to be vigilant about the potential reputational damage from having too many employees travelling into work.

"Firms need to remember that, to the public, saying they are a "key worker" is saying they are important like a nurse," said Rob Moulton, a financial services lawyer at Latham & Watkins. (Additional reporting by Tommy Wilkes. Editing by Carmel Crimmins.)