Response to job cuts article in Sunday Tribune
Issued : 4 July 2010
Responding to media speculation that 2,000 additional jobs may now be at risk in the country's two largest financial institutions, IBOA The Finance Union has said that the Union has not engaged in any substantive discussions with either institution on possible redundancies.
"It should be remembered that since the current banking crisis began, AIB and Bank of Ireland have together already shed over 3,000 jobs through a combination of non-renewal of temporary contracts and non-replacement of staff leaving voluntarily or through retirement.
"In AIB, apart from a non-specific comment by the Managing Director a few weeks ago to the effect that AIB would become a much smaller bank, there has been no indication of job losses on the scale suggested in this morning's newspaper. Management in AIB is currently focused on the disposal of its overseas assets in Poland and the USA along with the sale of its AIB UK banking operations in Northern Ireland and Britain. The attempted disposal of AIB UK smacks of the same short-termism that got AIB and other institutions into this mess in the first place.
"While we have no doubt that AIB is making contingency plans for various possible scenarios given the current uncertainties over these sales, the demands of the EU viability plan, and the prospects for a rights issue, the Bank has yet to engage IBOA in talks on any job losses as it is obliged to do under the current Partnership Agreement between the parties and, indeed, under employment legislation.
"We are currently in talks with senior management in Bank of Ireland on a job security agreement - with the objective of minimizing any future job reductions and ensuring that, in the event that redundancies are unavoidable in any area of the business, they will be implemented on a voluntary basis.
"Given that the new reality for banking is likely to involve a return to more prudent practices with much greater reliance on depositors for funding - and with higher standards of professionalism in dealing with customers, we would caution any institution against adopting the knee-jerk approach of simply cutting staff.
"The human capital of these institutions is every bit as important as the financial capital: cutting too deeply into the former can have significant consequences for the latter. Just like the reckless lending policies of recent years, job cuts may offer a short-term fix - but in the longer term they can have disastrous consequences creating a downward spiral of falling business that leads to further collapse to the detriment of staff, customers and the economy as a whole. For these reasons, IBOA always scrutinises any proposals for redundancy thoroughly and seeks alternative options, wherever possible."
