Anglo lay-off terms below bank norms
Issued : 8 September 2011
RTE
Department of Finance has no objections to Anglo terms
Staff at Anglo Irish Bank have been offered a redundancy package well below levels previously seen in the financial sector.
The Anglo offer presented on Monday is four weeks' pay per year of service, including statutory redundancy entitlements.
The total amount is capped at €175,000 per employee - with 130 redundancies being sought in the first round. The details were first published in the journal Industrial Relations News.
Traditionally, redundancy offers in financial services were around six weeks per year of service plus statutory redundancy.
But it is understood that level of payment is no longer considered appropriate by the Department of Finance. A statement from the department this evening said it was "aware of the conditions of the redundancy offer at Anglo Irish Bank and has raised to objection to those conditions".
The bank is proposing that the terms on offer would apply to any redundancy made by the bank over the next five years, if there were no unforeseen budgetary deterioration.
The Irish Bank Officials Association, which was only recently recognised at the bank, has voiced disappointment with the terms.
General Secretary Larry Broderick said the offer was well below industry norms, particularly given that Anglo staff were effectively being made compulsorily redundant. He said the issue may have to go to a third party for mediation.
Redundancy programmes at a number of other financial institutions have been on hold, pending indications of what level of payment the Department of Finance is prepared to sanction at Anglo Irish Bank.
Irish banking system still broken - Aynsley
Anglo Irish Bank chief executive Mike Aynsley has responded to reports that Finance Minister Michael Noonan is seeking to avoid paying back the full amount of the bank's senior debt.
Mr Aynsley said such a move would have to be consensual and agreed with Europe.
Speaking at a lunch for chartered accountants in Dublin, Mr Aynsley also said the banking system in Ireland remains broken and will not be fixed until proper leadership is in place in the banks.
He said good, reputable bankers needed to be part of repairing the banking sector.
On the Government's two pillar bank strategy, Mr Aynsley said the concentration would be too high and more alternative banks were needed.
He also said that Anglo Irish Bank expects to sign a deal to sell its $9.5 billion US commercial property loan portfolio in the next couple of weeks.
Sources have said that Wells Fargo, JP Morgan Chase & Co and Lone Star Funds were the winners of the portfolio, and that the total price paid was between $7 billion and $8 billion.
