Tuesday 21 November 2017

AIB promises 'generous' deal for 2,000 facing redundancy

Anne-Marie Walsh Industry Correspondent

BAILED-out AIB has promised a "reasonably generous" severance package after announcing that more than 2,000 workers will lose their jobs.

Unions want a deal worth six weeks' pay per year of service plus statutory redundancy of another two weeks.

There are now fears that such a deal for the nationalised bank could set a precedent for redundancies across the state sector, for example when quangos are abolished.

The scheme to cut AIB's 14,000-strong workforce in phases by the end of next year is the biggest redundancy scheme since the banking crisis began.

The bank, which is almost 93pc state-owned, announced the job cuts after posting record losses of more than €10bn this week.

AIB executive chairman David Hodgkinson warned that the bank could not rule out compulsory job cuts because it "would be half the size it was", but expected to get the "vast majority" of redundancies on a voluntary basis.


Although the severance package sought by unions is an industry norm, it is very generous compared with the minimum statutory packages.

AIB refused to give details of the budget it is setting aside for the severance payments.

But Mr Hodgkinson said the first thing it had to do was hold discussions with the major stakeholder -- the Government -- on what was "appropriate" before beginning consultations with unions.

"My belief is that we should be reasonably generous because people are losing their jobs and their livelihoods," he said.

Mr Hodgkinson admitted there was almost a kind of "collective madness" in banking where "everybody went crazy on property and for a very long time".

An AIB spokesman would not reveal which sections of its operations would be worst hit, but said there were no plans for branch closures.

The Irish Bank Officials Association said details of the redundancy package will be negotiated in the coming weeks.

General secretary Larry Broderick said the job losses were equal to a major multinational pulling out of the country.

Irish Independent

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