IBOA shocked and disappointed at Bank of Ireland's actions in bonus row

Issued : 4 March 2011

IBOA The Finance Union has expressed shock and disappointment at the findings of the Department of Finance's investigation into the level of bonuses paid in Bank of Ireland in recent years.

IBOA General Secretary, Larry Broderick, said that: "This whole affair - including senior management's failure to respond properly to the Department's initial request for information - has further damaged the credibility of the Bank of Ireland and has seriously undermined the substantial efforts our members have been making on a daily basis to rebuild the reputation of the Bank with its customers.

"Our members in Bank of Ireland feel particularly aggrieved to discover that while they have been endured a pay freeze, the deferral of outstanding pay awards, a reduction in pension benefits and over 2,000 job losses so far with a further 500 in the pipeline, senior executives have received substantial bonuses from the Bank.

"I would not and could not advocate that anyone's contract of employment be unilaterally broken. However, in our dealings with senior management over various contractual entitlements for the ordinary Bank staff we represent, we have been told that we should expect to have to prove these entitlements in court.

"I believe that senior executives should be held to the same standard and that if any of these payments are not found to be contractual, they should be refunded. Where these payments are found to be contractual, the Bank should engage with these senior executives to seek agreement on deferring payment until such time as the Bank is in a better position to meet its obligations.

"I note that the Bank has paid a penalty of €2m to the Department over this matter. I believe the Bank's senior management should also make a full apology to their staff who once again have to bear the brunt of the public's anger over decisions taken by the Bank. I would also urge the general public to resist venting their anger on ordinary Bank staff who feel equally aggrieved at the present situation."

IBOA is to seek a meeting at the earliest opportunity with the new Minister for Finance to discuss more widespread reform of remuneration policies within the financial services sector.

"It is long past time that we moved away from the reward practices introduced over the last decade or so," said Larry Broderick, "which have distorted the significance of performance-related pay in comparison to basic pay. These practices have also facilitated the shift in the culture of banking towards an excessive obsession with amassing super-profits - at the expense of ordinary customers and staff - and with devastating consequences for the wider economy."