AIB may face industrial action over EBS

AIB is facing possible industrial action following the collapse of talks to resolve a row over a bonus payment at its EBS subsidiary.

Members of the Unite trade union at EBS, which is part of the AIB group following the restructuring of the Irish banking sector, are to hold a general meeting tomorrow to decide on their next steps following the breakdown of talks at the Labour Relations Commission.

Unite sources warned that if the meeting backed industrial action, any pickets may not be confined to EBS outlets and could be placed on selected AIB premises as their members are now all part of the same institution.

It is not clear what action AIB workers, who are mostly members of the Irish Bank Officials Association, would take in the event of EBS staff placing pickets on any of their premises.

Bonus discontinued
The row centres around a bonus – known as the 13th month payment – which EBS staff received for about 40 years but which was discontinued in 2011 following the merger with AIB.

Following a one-day strike in late 2011, half of the bonus was paid to EBS staff.

Earlier this year, the Labour Court ruled that the bonus payment should be discontinued, but that the remainder of the amount due from 2011 should be given to staff.

The amount involved for the 300 Unite members in EBS is understood to be the equivalent of two weeks’ wages.

Harmonisation of terms
The situation in the company is further complicated by the need for harmonisation of terms and conditions between EBS and AIB following their merger.

Unite members voted 91 per cent in favour of industrial action following the Labour Court recommendation, if management does not pay the remainder of the bonus due from 2011.

Industrial action could also be triggered “in the event that EBS/AIB management attempt to enforce any changes to terms and conditions of employment or pension benefits without prior agreement”.

AIB told The Irish Times yesterday that "EBS management remains committed to resolving these issues through the established industrial relations processes of the Labour Relations Commission and Labour Court".

EBS Building Society became part of AIB in July 2011 as part of a Government move to form two pillar banks in Ireland – the other being Bank of Ireland.

Separate subsidiary
It continues to operate as a separately branded subsidiary of AIB with its own banking licence and 82 branches offering residential mortgages and savings products.

In 2012, EBS’s total operating income declined by 20 per cent to €73 million.

Its residential mortgage book reduced by 4 per cent while total customer deposits rose by 19 per cent to €10.1 billion.

Its operating profit before provisions fell to just €1 million from €49 million in the previous year.

The institution’s provisions for impairments on loans increased to €237 million in 2012 from €201 million in 2011.

That brought its total provisions to €750 million and left it nursing a loss for 2012 of €236 million.