Bank of Ireland staff in line for 7.5% pay hike over two years

Most of Bank of Ireland’s 9,000-strong workforce is on track to receive a 7.5 per cent pay hike over two years, marking its biggest pay award in over a decade, as the cost of living soars.

The agreement, which must be accepted through a staff ballot, will see employees in the lower three ranks of its seven-level grading system receive a 4 per cent pay increase this year, followed by a 3.5 per cent raise in 2023, linked to performance.

The deal is in line with recommendations from the Workplace Relations Commission (WRC) after talks between the bank and its main labour representative body, the Financial Services Union (FSU), had stalled.

"This deal is the most significant pay award we've made in over a decade. Following the exceptional challenges of the last two years, we are pleased to be able to provide our colleagues with clarity on pay to the end of 2023," said Bank of Ireland's chief people officer, Matt Elliott.

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Bank of Ireland is also adjusting entry-level salaries in the Republic by €1,500, to €26,500, and by £1,000 (€1,190) to £18,500 in the UK, and is increasing the monetary award to staff who enhance their professional qualifications, it said.

“We believe it is essential that we can reward colleagues for high performance. However, we operate under restrictions which ban performance-related variable pay which many other companies – in banking and other sectors – offer widely,” Mr Elliott said.

"These restrictions are unique to Ireland and place Irish banks at a serious competitive disadvantage to other employers. We will continue to press for the normalisation of pay for workers in Irish banks to ensure we attract and retain talent at all levels."

Ulster Bank deal

The accord comes two weeks after Ulster Bank agreed to pay a 4 per cent salary increase for most of its employees, even as the lender prepares for waves of redundancies as it retreats from the Irish market in the coming years.

Ulster Bank, a unit of UK-based NatWest Group, also agreed a 6.5 per cent increase for low-paid staff and to introduce an entry-level rate of €30,015 for new starters, making it the best starter salary in the sector in the State.

“Last November the FSU stated our desire that pay increases in the main retail banks would have to reflect the professional and incredible work of our members over the last 12 months in difficult circumstances and take inflation into account,” said John O’Connell, general secretary of the FSU, on Wednesday.

“Pay increases, from profitable employers, play a vital part in protecting workers from the rising cost of living. That is why the FSU has been vocal in highlighting that any pay increase in the sector needed to be inflation proofed.”

Still, the pay hikes agreed do not keep up with current headline inflation. Irish consumer price growth was running at an annual rate of 5.5 per cent in December, amid a general spike in inflation globally as economies grapple with supply, energy and labour issues in the wake of the Covid-19 economic shock. The European Commission forecast last week that Irish consumer prices will rise by 4.6 per cent this year.