Voluntary package at Ulster Bank is oversubscribed

ULSTER BANK has received 1,100 applications from staff for 950 voluntary redundancies sought but has yet to decide whether this will rule out a requirement for compulsory layoffs.

The bank is reviewing where the applicants work within the bank before confirming whether they can offer redundancy.

The lender has set specific reductions in staff numbers at business units and wants to avoid leaving divisions under-resourced. This process is likely to take time, although staff in smaller divisions will learn their fate more quickly than others.

Ulster Bank, which is owned by state-controlled UK bank Royal Bank of Scotland, had no comment on the level of applications.

The bank has said it is seeking the redundancies over the next two years but most of the departing staff will leave this year.

AIB, meanwhile, has said it is not offering voluntary severance to staff in its commercial and corporate banking, corporate finance, transformation and internal audit divisions but this will be reviewed.

Staff were told that the redundancies would be accepted on a phased basis to meet the needs and capacity of business units.

The bank, which is seeking 2,500 job cuts, is not opening the scheme to risk, legal, non-core corporate affairs and marketing divisions yet but this will be reviewed at the end of this year or the start of next year.

Staff in AIB’s mortgages division were told they could not apply for redundancy until next year. Branch staff across AIB’s 270 branches can avail of voluntary redundancy immediately.

The bank will consider severance applications from staff in AIB’s British division and First Trust unit in Northern Ireland from the beginning of August.

Ulster Bank is also offering early retirement as it aims to reduce its headcount of 6,000 in Ireland. The latest redundancy plan has been oversubscribed despite a reduced severance pay offer compared with lump sums offered under a job-cutting plan in 2009.

Staff are being offered two weeks’ pay for each year of service in addition to their statutory entitlement of two weeks’ pay. This compares with an average of seven weeks pay plus two weeks statutory pay in the 2009 scheme, which led to 1,000 employees leaving.

Staff in the Irish Bank Officials Association voted earlier this month to accept the recommendations of an independent mediator setting the terms of the payouts.

Severance payments in Irish banking have declined since the first layoffs in the banking crisis.

Bank of Ireland and AIB staff have been offered reduced redundancy terms in line with public sector payouts due to the State funds injected into the banks.

The IBOA has said there may be a further 1,000 redundancies at Bank of Ireland, which has also recently agreed reduced terms for departing staff. This includes 400 originally sought under a plan announced in 2010 for 750 redundancies but which was put on hold after the Department of Finance sought a lower level of severance.

The IBOA has called for a Government employment strategy to deal with the thousands of bank staff to be laid off in addition to the 6,000 staff it estimates have left banking since the autumn of 2008.