Departing AIB staff to get three weeks' pay per year served
ALLIED Irish Banks looks set to pay three weeks' pay for every year of service when the bank finally unveils its long-delayed redundancy plans.
Such a deal would see AIB give employees get slightly less than the three-and-a-half weeks offered by Ulster Bank when it unveiled a redundancy plan for 1,000 workers late last year. It will also be less than the four weeks offered to Bank of Ireland staff when 750 staff were offered a package last autumn.
All figures exclude two weeks' statutory pay which staff are also due.
Three weeks' pay would amount to half that demanded by the Irish Bank Officials Association (IBOA). Still, it would be similar to severance payments announced by the Health Service Executive in recent months.
A spokeswoman for AIB declined to comment on a similar report in yesterday's 'Sunday Business Post'.
A Department of Finance spokesman said any financing package must be "fair to both the employees in the banks and the taxpayer".
Packages should also take account of "substantial investment and the new norms in the banking sector and the wider economy".
Banks have typically paid about six weeks' salary plus two weeks' statutory pay per year of service, but that has fallen as the crisis has worsened. A package offered by Anglo Irish Bank last year was capped at two weeks' pay per year of service, excluding statutory pay.
AIB chief executive David Duffy told employees in an email seen by the Irish Independent last week that redundancy terms would have to "be reconciled by the Department of Finance with other banks in a similar situation."
Mr Duffy added that he believes the bank was "now close to reaching agreement" and added that he was "working to finalise terms with the Department of Finance and discussing issues with the IBOA".
Mr Duffy apologised for "the long wait for the negotiation process on severance terms", which he admitted had "fuelled understandable impatience" among staff.
News that a redundancy deal is finally close to agreement follows almost a year of talks.
AIB announced the plans last April for a "reasonably generous" severance package when it said more than 2,000 workers would lose their jobs.
The bank, which is almost completely owned by the State, has to shrink its 14,000-strong workforce because it has sold units, is lending less and losing billions of euro.
The Department of Finance rejected several proposals last year because they were too generous and set a precedent for the entire banking sector.