IBOA and Bank of Ireland accept mediator's recommendation on revised redundancy terms

Issued : 24 October 2011

Contrary to a report in one media outlet last week that the Department of Finance 'quashed a move by Bank of Ireland and IBOA The Finance Union to arrive at a deal on voluntary severance terms,' neither side has been advised as such by the Department of Finance.

IBOA The Finance Union and Bank of Ireland have both accepted the recommendation of independent mediator, Mark Connaughton SC, on modified redundancy terms for staff who are expected to depart from the Bank over the next fifteen months.

Under the revised terms which will remain voluntary, departing staff are to receive four weeks' pay per year of service plus statutory entitlements (of two weeks' pay per year of service). Mr. Connaughton, also oversaw the original redundancy deal agreed in July 2010 as part of the EU Restructuring Plan for the Bank. The severance terms fixed at that time were for six weeks' pay per year of service plus statutory entitlements.

The viability plan, which includes a comprehensive programme of measures involving sacrifices on employees' pay and pensions as well as 750 job cuts, was endorsed by the EU Commission and approved by the Department of Finance.

While 270 redundancies were implemented in Northern Ireland and Great Britain towards the end of 2010, proposals to roll out the next tranche of job reductions in the Republic were put on hold in April 2011 when the Department of Finance reportedly asked the Bank not to allow any further employee departures on the redundancy terms agreed in July 2010.

Accordingly, the Bank engaged with IBOA in further talks with a view to modifying the terms previously agreed between the parties. After protracted negotiations which again required independent mediation, Mr. Connaughton issued a new recommendation to the two sides in early September - which was also forwarded to the Department of Finance - and which has now been accepted by both the Union and the Bank.

"Though naturally disappointed that the terms of the mediator's original recommendation were no longer available even though they had been approved by the EU Commission," said IBOA General Secretary, Larry Broderick, "IBOA's Bank of Ireland Executive Committee has decided to accept the revised terms proposed by the mediator as a further contribution to the continuing efforts to stabilise Bank of Ireland in the national interest.

"The Committee has also welcomed the mediator's recommendation that those staff who opt to depart at this time should also be able to avail of re-training grants since job opportunities within the financial services sector are now extremely limited in view of the continuing downsizing of leading institutions in Ireland," he added.