Allied Irish Banks to open voluntary severance

ALLIED IRISH Banks will start accepting voluntary redundancy and early retirement from staff tomorrow after the bank accepted the recommendations of the Labour Relations Commission.

Chief executive David Duffy told staff in an email that those seeking early retirement could leave up to the end of the year, while the redundancy plan would be open until March 2014.

Staff leaving under voluntary redundancy and early retirement would take place on “a phased basis according to the timescales and resource requirements of each business unit”, he said.

“There are some areas of the bank where it will not be possible to open the voluntary severance scheme to staff for some time owing to business needs.”

Members of AIB’s executive committee will write to staff today about how the redundancy plans will affect eligibility for their staff and the timing of departures.

The bank is seeking 2,500 redundancies to reduce costs.

“I fully appreciate that this is a very significant day in AIB’s history and an emotional one for many of you. Unfortunately it is a step we have to take to return the bank to viability,” Mr Duffy said.

Plans and strategy for the bank were “well advanced”.

Staff are being offered severance pay of three weeks’ salary for each year of service plus the statutory two-week redundancy, or four weeks inclusive of statutory entitlements, whichever is the better.

Kevin Foley, director of conciliation at the commission, recommended that payments be capped at €225,000 or two years’ salary, which was the lower amount.

Staff must have five years of continuous service to be eligible.

The bank is opening the early retirement scheme to staff aged at least 50 by the end of the year.

Mr Duffy said the terms were consistent with those available at other banks in receipt of State aid.