90pc of AIB staff will pocket pay rise as bank plans to repay bailout funds
Published 08/08/2015 | 02:30
Most AIB staff are in line for pay rises after unions recommended proposals from a Labour Relations Commission (LRC) mediator.
The LRC mediator has been working with AIB and banking union the Irish Bank Officials Association (IBOA) to negotiate conditions for staff.
Now the mediator has recommended an immediate 2pc increase backdated to January 1, 2015, for all AIB employees earning less than €100,000 in the Republic or £80,000 in the UK. The mediator also proposed negotiations begin on a new performance-based pay structure to be concluded by the end of this year.
That pay hike will likely be passed on to about 90pc of AIB's 10,599 employees.
The IBOA added that the mediator had recommended that the current agreement between the union and the bank on job security should be extended by a further 12 months until the end of February 2017. This ensures there will be no compulsory redundancies and underpins the existing voluntary severance terms secured by IBOA in 2013.
The pay recommendations came as AIB said it may repay several billion euro of bailout funds to taxpayers before part of the bank is put up for sale next year.
The Government put close to €21bn into AIB in the aftermath of the banking crash in 2008. The State now owns more than 99pc of the lender.
The Government has indicated that it will sell at least part of that holding in 2016.
Before that though, AIB chief executive Bernard Byrne said the bank would try to repay some of the bailout funds next year.
As part of the bailout, the Government took €3.5bn worth of "preferred shares" and another €1.6bn securities known as "contingent convertible notes". It is these that the bank may look to redeem.
Mr Byrne said the bank was now in a position where there was a realistic prospect of the bailout funds being paid back in their entirety.
"The message we have been putting out as an institution is that we can get to a point where €21bn is returned to the State. We are not saying the bank today is worth €21bn.
"We also have one-off gains coming from the better credit provisioning that we have now than [during the crisis]. The outlook is obviously more positive now," Mr Byrne added.