Thursday 8 December 2016

Bank jobs: pressure on Noonan after €450,000 payoff

Laura Noonan Banking correspondent

Published 31/01/2012 | 05:00

Finance Minister Michael Noonan. Photo: PA
Finance Minister Michael Noonan. Photo: PA

FRESH revelations of payoffs worth up to €451,000 in State-rescued banks will heap intense pressure on Finance Minister Michael Noonan as he attempts to strike a deal on 2,500 job cuts in the sector.

  • Go To

A manager at bailed-out Permanent TSB got the lucrative deal in the months immediately after the bank's rescue by taxpayers last summer, the Irish Independent has learned.

He was among 300 workers at Permanent TSB who shared a pot of €28.7m since the bank's €2.8bn rescue last summer.

The payoffs were part of a redundancy bonanza that paid out a total €56.8m to 701 individuals in banks after they were rescued. Fresh details emerged last night of the generous deals for staff at AIB, EBS, Permanent TSB, Anglo and Irish Nationwide.

The size of the deals will pose serious problems for Mr Noonan as he attempts to push through lower-cost redundancy payments for an additional 2,500 bank workers.

Under the terms of our EU/IMF bailout, the Government has been told to urgently push ahead with thousands of redundancies at other rescued banks.

But it has to do so while offering much less generous terms.

The majority of these staff cuts are scheduled for AIB which must cut 2,000 staff.

But progress has been frozen as the Department of Finance tries to impose lower payoffs for bank workers.

Mr Noonan has insisted that future redundancy deals would not match the terms previously offered to bank workers.

He stressed that the terms of the packages at banks were "generally no longer available due to the changed and challenging circumstances at the institutions".

Last night the chief executive of the Irish Bank Officials' Association (IBOA) signalled a tough battle as it negotiates future redundancy terms.

IBOA chief Larry Broderick said: "It's extraordinary if they're able to pay out those amounts and we're having difficulties trying to get out our packages."

He described the packages of more than €400,000 as "extraordinary figures, unbelievable".

"That definitely won't happen for our members," he said.

He said the union accepted that circumstances had changed but did not want to see members forced to take a package of three weeks' pay plus two weeks' statutory previously used in the HSE. He said that bank workers would be looking for four weeks' pay plus two weeks' statutory instead.

When staff are made redundant, the banks are only obliged to pay statutory redundancy at a maximum of €1,200 per year of service.

But the Government and banks are aware that they will not be able to achieve the high number of voluntary redundancies they are looking for if they do not offer terms that attract staff to an exit deal. If they proceed with forced redundancies then bank workers could strike in protest.

The 316 Permanent TSB staff who left the bailed-out bank since June last year got the highest packages of any bailed-out bank.

This happened even though their departures were the most recent and their cheques were signed when the full cost of the banking crisis was known.

Their redundancy scheme gave them 5.25 weeks' pay per year of service, plus two weeks' statutory redundancy, up to a maximum of 2.75 times their annual salary.

It meant that 10 Permanent TSB executives got redundancy packages of more than €242,000, including the one manager who got €451,000.

The average €90,800 enjoyed by Permanent TSB staff was the highest of all the rescued banks.

The details were revealed by Mr Noonan in response to a question from Independent TD Maureen O'Sullivan.

Sources said the payments at Permanent TSB reflected the lengthy service clocked up by the departing staff.

The figures provided by Mr Noonan cover Permanent TSB's layoffs from its rescue on June 27 to the end of 2011.

A spokesman for Permanent TSB stressed that the packages were set out before the bank had to be rescued last summer.

Meanwhile, the lowest average redundancy payments were at the newly-renamed Irish Bank Resolution Corporation (IBRC), which encompasses Anglo Irish Bank and Irish Nationwide.

But some 385 staff who left both institutions since January 2009 were still paid an average of €47,800.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business