AIB redundancy terms due in March

Bank says it is close to an agreement on redundancy terms for the 2,000 staff due to leave the State-owned lender. Photograph: The Irish Times

SIMON CARSWELL Finance Correspondent

Allied Irish Banks has told staff that it expects to be able to announce long-awaited redundancy terms for more than 2,000 staff within the next month.

David Duffy, the chief executive of the bank, said in an internal email to staff this afternoon the bank was close to reaching an agreement on the package and was working to finalise terms with the Department of Finance.

“I hope to have the final issues resolved soon and expect to be able to communicate with you all in detail within the next month,” said Mr Duffy.

“This timing is of course contingent upon the actions of other parties but we are managing the process extremely tightly to increase our chances of meeting this timeframe.”

Mr Duffy said he was aware the long wait for a conclusion to the negotiations on severance terms had “fuelled considerable speculation and understandable impatience” among staff. The redundancies have to be on the same terms agreed by the department with other banks in a similar situation, he said.

State-controlled AIB announced plans to make more than 2,000 staff redundant in April 2011 but has been unable to accept voluntary redundancies from staff due to the absence of an agreement on the terms with the department.

A spokesman for the department said that any redundancy package “must be fair to both the employees in the banks and the taxpayer who have made a substantial investment in the Irish banks”.

The Government has injected €20.8 billion into AIB and its subsidiary, EBS, taking a stake of more than 99.8 per cent in the bank.

Irish Bank Resolution Corporation, the nationalised lender that was formerly Anglo Irish Bank, set a cap of €175,000 on payments made to staff under a redundancy package last year.

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