Bumper pay-offs pit AIB against Noonan
PLANS to give laid-off bank workers redundancy payments ranging from €50,000 up to €300,000 have put state-owned AIB on a collision course with Finance Minister Michael Noonan.
The Department of Finance has yet to approve the terms of AIB's upcoming redundancy programme -- even though they were submitted over a month ago -- because the pay-offs the bank wants to give its 2,000 departing staff are seen as "too generous".
Mr Noonan is believed to be concerned that an overly generous package would draw further anger from a public already outraged at the bank being bailed out to the tune of €7.2bn.
The authorities are also believed to be conscious of the fact that the AIB scheme would set an expensive precedent across the banking sector, where thousands more jobs will be cut over the coming years.
Although exact details of the redundancy package have not been released, the trade union IBOA has been pushing for the "industry norm" of six weeks' pay plus two weeks' statutory redundancy per year of service, capped at between 2 and 2.75 years.
Based on this package, a bank worker on a €50,000 salary entitled to the maximum pay-off would receive a redundancy payment of €138,000.
However, a senior executive on a salary of €100,000 would be entitled to a payment of €275,000.
The IBOA has estimated that 10,000 jobs will be lost in the banking sector over the next number of years.
A spokesman for AIB declined to comment on the redundancy scheme negotiations last night.
The Department of Finance would only confirm it had "received proposals from AIB" and was "currently considering them".
Executive chairman David Hodgkinson has publicly said the redundancies should be "reasonably generous" to reflect the fact that staff were "losing their jobs and their livelihoods".
But he cautioned that agreement would have to be reached with the Government on an "appropriate" redundancy scheme before any deal could be done with trade unions.
"We are in negotiations with the banks and there has been no decision yet in terms of packages," IBOA general secretary Larry Broderick said last night, adding the bank had yet to provide clarity on which sections job cuts would come from.
Mr Broderick stressed that the IBOA was also still seeking reassurance from AIB that any job cuts would be voluntary.
Asked about the Department of Finance's reluctance to approve the plans mooted by AIB, Mr Broderick said the department should be "taking their lead from Government in this regard".