IBOA calls on AIB to honour its staff's contracts as Tribunal identifies confidential payments to top executives

Issued : 17 May 2012

AIB should now honour all contractual payments to staff, declared IBOA General Secretary, Larry Broderick, after rulings by the Industrial Tribunal in Northern Ireland on two cases sponsored by the Union.

In the first case the Tribunal found that the Bank's decision to withhold increments due to staff constituted a breach of contract and an unlawful deduction from wages - while in the second case the Tribunal ruled that staff who had been denied a performance-related bonus were entitled to be paid.

IBOA General Secretary, Larry Broderick, said: "the unanimous decision by the Industrial Tribunal in Northern Ireland follows a similar judgment by the Employment Tribunal in London. The Bank should now accept that it is not entitled to deny the contractual entitlements of its staff. It should now make the payments due to all of its staff in all three jurisdictions, Northern Ireland, Great Britain and the Republic.

The IBOA leader pointed out that while the Industrial Tribunal recognised that the Bank had experienced substantial financial difficulties in recent years, it also took account of the payment of substantial secret payments to senior executives.

In its decision, the Tribunal noted that:

"The respondent (AIB) made substantial losses in 2009 and 2010. It required the support of the Irish Government in the sum of approximately 20 billion euros. This support was made conditional by the Irish Government that there would be no further bonuses or pay increases made. However, the Bank did make extra non-contractual payments to certain staff in both the First Trust and the AIB UK Bank in 2011. These were referred to as 'Special Awards' in the correspondence the Tribunal has seen and amounted to almost £3 million in July 2011. The terms of the Special Awards were:
(a) The letter and the Special Award to be kept strictly confidential by the recipient.
(b) That at the dtae of payment the recipient is still employed by the Bank, has not served notice of resignation, had not received notice of termination of employment and that there is no disciplinary investigation or action against the individual.
(c) The terms of the recipient's contract would also be varied to require three months' notice of termination.

"In Northern Ireland in the First Trust Bank the grades receiving this award were all senior management level, i.e., Executive Senior Managers and Managers. Payment was made to 24 individuals totaling £426,000."

"The confirmation that secret payments have been made to senior executives in First Trust Bank is outrageous," said Larry Broderick. "We suspect that similar payments have also been made elsewhere in AIB Group. It simply beggars belief that this should be taking place while the Bank was not only pleading poverty to its staff but also warning that thousands of job cuts would be needed. The lack of transparency from an institution that is now effectively State-owned is appalling.

"AIB should now accept that it has acted unlawfully; withdraw its appeal against the earlier judgment by the Tribunal in London; and honour all outstanding payments due to its staff in all three jurisdictions."