Staff at EBS are balloting for industrial action after being told they will not receive an annual Christmas bonus of up to €5,000 per person as the Government’s bailout deal with Allied Irish Banks, the building society’s new owner, prohibits bonus payments.
The former building society has instead offered staff an interest-free loan of up to two years to the equivalent value of the bonuses.
Colm Quinlan of the Unite trade union said a ballot of EBS staff on the issue is now underway. He said the yearly payment was “effectively a form of payroll savings scheme” and not a bonus, and that the average earnings of the people affected was €30,000.
“We have been shocked by some of the callous disregard shown to staff across the banking sector in recent years but this goes straight to number one in the chart of cynical acts. Even Scrooge would not have stooped as low as this.”
EBS has paid a bonus amounting to a month’s pay to 370 staff below management level at Christmas every year for more than 30 years, said a spokesman for the nationalised institution.
The State is injecting €2.4 billion into EBS and a further €18.4 billion into AIB, which acquired the former building society in July. The Government insisted in its agreement with AIB that no bonuses be paid.
The bonuses had to be paid under the employees’ contractual arrangements with EBS, said its spokesman. He confirmed that the payments had been made over the three years since the introduction of the bank guarantee.
The spokesman said that the Christmas bonus - known within EBS as the “13th month” payment - was fully disclosed to the Department of Finance and the Central Bank over the past three years.
This year’s bonuses would have cost EBS €1.3 million and were due to be paid into staff bank accounts on Friday but employees were told earlier this week that payments were not being made.
The EBS spokesman said that, on the basis that staff may have been expecting this year’s bonus and spent the money in advance, two or three-year interest-free loans were being offered to staff. The loans would be repaid directly from their pay packets, he said.
Bonuses were prohibited under the “placing agreement” reached between the Government and AIB in July under which a further €13 billion of public funds was injected into the enlarged nationalised bank comprising AIB and EBS.
“Our view was, up until now, that this was a contractual entitlement for staff that he had disclosed to the regulator and the Department of Finance for responses to parliamentary questions,” the EBS spokesman said.
“It is not a performance-related bonus. No manager has received a performance-related bonus since 2008 and they would not have received a Christmas bonus.”
The Department of Finance said the Government insisted in its agreement with AIB that no bonuses be paid due to the significant financial assistance the State has provided to the Irish banks.
“This was based on clear legal advice,” said the department.
The payment of the bonuses at EBS was raised with the department in late October/early November and management was told that bonuses were prohibited.