THE DEPARTMENT of Finance is unlikely to approve a Bank of Ireland redundancy deal offering staff six weeks’ pay for every year of service.
Last month, the bank agreed with the Irish Bank Officials Association to offer staff in the Republic who take voluntary redundancy four weeks’ pay, and their statutory entitlement of two weeks’ salary, for every year of service.
Originally the two sides had agreed that staff would be offered six weeks’ pay and their two-week statutory entitlement, a total of eight weeks, but they renegotiated this at the behest of the Department of Finance in April.
However, it seems likely the department, whose approval is needed before the package can be offered to staff, will refuse to endorse the new deal.
A department spokesman pointed out yesterday that the bank could only honour an agreement that is in line with voluntary redundancy packages offered to the public service.
Last year, staff in the Health Services Executive took a package totalling four weeks’ pay for every year of service. This was made up of their two-week statutory entitlement plus two weeks extra.
The department’s spokesman said the Bank of Ireland/IBOA deal did not “reflect” the terms agreed between the HSE and its staff last year.
The IBOA issued a statement yesterday saying the department had not communicated with either side in relation to the renegotiated redundancy package. It said the two sides forwarded the new terms to the department in September, shortly after they had been agreed in talks conducted with the aid of a mediator, Mark Connaughton SC.
The department was not involved in the mediation process, but its spokesman said it had let its views be known to both the bank and the union.
The department has the final say as Bank of Ireland is one of a number of institutions that had to be bailed out by the taxpayer after the Republic’s property market crashed in 2008.
The State invested €4.2 billion in the bank and holds a 15 per cent stake as a result. A group of North American investors subsequently paid €1.1 billion for 35 per cent of the bank, saving it from Government control.
The bank is in the middle of cutting 750 jobs from its payroll. Last year, 270 workers based in both Northern Ireland and Britain took voluntary redundancy. The job cuts are part of a viability plan agreed with the EU and the Department of Finance.
