Noonan rejects AIB's €300,000 payout packages
Published 08/06/2011 | 05:00
FINANCE Minister Michael Noonan has shot down AIB's plans to give laid-off workers redundancy packages that could range from €50,000 to €300,000.
Sources last night confirmed that AIB had been asked to submit "revised" redundancy proposals after the Department of Finance rejected the bank's initial plans.
Those plans are believed to have included "industry norm" payments of six weeks' salary per year of service plus an extra two weeks' statutory payments for every year worked.
The state-owned bank is also believed to have asked for permission to cap the payments at between two and 2.75 years' salary.
Based on that package, a bank worker on a €50,000 salary entitled to the maximum payout could walk away with €137,500.
Senior executives on €100,000 a year could get as much as €275,000, if they'd worked at the bank for more than 20 years.
Similar packages have been paid by other banks, but AIB's proposals were perceived as "too generous" in the context of a bank that's been bailed out to the tune of €7.2bn and will need billions more before the year is out.
Mr Noonan and his officials are also mindful of the fact that AIB's package will create a precedent for the state-owned banks, who will shed thousands more jobs over the coming years.
The Department of Finance last night declined to comment on the situation with AIB.
A spokesman for the bank refused to confirm any talks with the Department of Finance but said discussions with trade unions were "ongoing". "We wouldn't want to comment at this point," he added.
Larry Broderick, head of bank workers' trade union IBOA, said the bank had not told them that approval had been sought from the department for any package.
"They keep reminding us that whatever we agree has to be sanctioned by the Department of Finance, but that's a different thing," he said.
"They can put whatever package they want in place (with Finance) but unless they agree it with us there won't be any redundancies."
A meeting between IBOA and AIB bosses is scheduled for Friday -- Mr Broderick said his side would use the meeting to formally push for "industry norm" payments.
Mr Broderick said he had expected things to move more swiftly after AIB announced the job cuts in April and that there was a "concern that things are being dragged out indefinitely".
"The discussions have been stalled for the last couple of weeks because AIB have just appointed a new management team and they haven't made their plans yet," he added.
Meanwhile, staff at the Central Bank will today vote through a new agreement that will reward top performers with up to five days' extra holidays a year.
The 'performance management system' replaces the bank's old bonus system, which was disbanded after the financial crisis hit in 2008.
Under the new scheme, staff can earn 'merit days' for hard work and may ultimately be paid up to half the 'merit days' as a "cash benefit".