Union tells AIB staff to ignore job cut rumours
Issued : 8 June 2010
Irish Independent
Finance union IBOA has told its members in Allied Irish Banks to ignore bubbling speculation about job cuts as it has not even begun talks with the loss-making bank about the issue.
AIB managing director Colm Doherty has signalled on a few occasions over the past six months that job losses would be coming down the tracks as the bank, which employs about 12,000 people in Ireland across its Republic of Ireland, Capital Markets and Group divisions, shrinks in size.
AIB, which employs 3,000 alone at Group level, hoisted the 'for sale' sign over its Polish unit Bank Zachodni WBK, its 22.5pc stake in US lender M&T and its UK division at the end of March in order to raise some of the €7.4bn of capital required by the end of the year to hit new regulatory targets.
In a message to AIB workers, IBOA general secretary Larry Broderick said: "Discount any rumours circulating about job reductions or further changes to pension entitlements or any similar stories."
He added that Mr Doherty, who took over the helm last November, had committed to negotiating with the IBOA "through an agreed process" before he looks to restructure the bank's operations in the Republic.
"There have been no discussions between the bank and IBOA, as required under the existing collective agreement and under labour legislation," Mr Broderick said.
Workers at AIB voted three months ago to accept the group's plans for members of its defined benefit pensions plan to start contributing 4pc of their salaries to the scheme from April. Beneficiaries of the scheme will see their contributions rise to 5pc next year.
Guarantees
Staff who joined the bank before 1998 are part of the new plan, which guarantees pensions of up to two-thirds of final salary. AIB managed to halve its pension deficit in the final six months of last year to €714m.
Unveiling annual pre-tax losses of €2.6bn in March, as a result of €5.3bn of bad-loan writedowns, Mr Doherty said he was preparing to announce a large job cuts programme after Brussels delivers its verdict on the state-aid restructuring plan.
AIB submitted its viability plan to the European Commission last November. But a spokesman for the bank declined to comment on how advanced EU's deliberations were.
Robbie Henneberry, head of the bank's Irish operations, reportedly said internally in April that voluntary redundancy and early retirement schemes were being considered.
Joe Brennan
