AIB IS to pay up to €10 million in backdated bonuses to approximately 90 employees following a High Court ruling last week.
The bank confirmed last night that its Capital Markets division will honour all bonus payments to staff arising from their performance in 2008, though it said it had “no plans” to pay bonuses for 2009.
“On foot of the recent High Court decision, AIB Capital Markets will be making bonus payments to staff as per the contractual entitlements arising from the business’s performance in 2008,” the bank said last night.
Last week, John Foy, a trader in AIB’s capital market division, who sued the bank for non-payment of a €161,000 bonus, secured liberty from the Master of the High Court to enter final judgment in that sum against AIB.
AIB did not oppose the order in favour of Mr Foy. Mr Foy is one of 90 traders in the division who have taken similar actions arising from the withholding of bonuses under the Government’s bank guarantee scheme.
The action by Mr Foy was regarded as a test case for the other claims. Mr Foy said he was notified in January 2009 by his line executive Michael Cronin that his contractual bonus for 2008 would be €160,000, which would be paid in full in February 2009.
He was later told payment was being deferred until further notice. This had caused “unjustified hardship” to himself and his family the court heard last week.
Dublin-based law firm McDowell Purcell Solicitors is acting for the 90 plaintiffs.
It is believed that most of the 90 traders in question still work for AIB.
AIB ceased paying bonuses after a Government-appointed committee recommended no bonuses be paid for 2008 and 2009. After legal actions were initiated by overseas capital markets staff, however it did pay what the bank called “contractual bonus entitlements”.
AIB said yesterday that there are no plans to pay bonuses to capital markets staff for 2009. It is believed that there are currently no legal claims in place in respect of 2009 bonuses.
AIB Capital Markets comprises the group’s Global Treasury, Investment Banking and Corporate Banking divisions. It is unclear how many employees, in addition to the group of 90 who initiated legal proceedings, will be eligible for a bonus pay-out.
Approximately two thirds of the plaintiffs took their action in the High Court, the court which deals with claims greater than €38,000; the remainder have been issued in the Circuit Court.
In addition to the €161,000 bonus, Mr Foy was permitted by the court to enter final judgment against AIB for an interest payment of 8 per cent on the amount as well as his legal costs.
