Most of AIB’s employees are on track to receive a 10 per cent pay increase spread over three years in the longest-lasting pay deal struck between an Irish retail bank and trade union officials as a result of a spike in living costs in the past year.
It is understood that more than 6,000 of AIB's existing 8,900 staff will benefit from the agreement with the Financial Services Union (FSU), which applies to staff below manager grades. It comes at a time when AIB is continuing a voluntary redundancy plan that began last year and is set to run into 2023 as chief executive Colin Hunt seeks to rein in costs.
The accord, which is subject a ballot of FSU members at AIB that runs to May 20th, also envisages entry-level salaries in the Republic rising to a minimum of €28,000 from €25,664, currently.
“These negotiations were long and tense and there were times throughout that it looked like we would not come to an agreement,” said John O’Connell, general secretary of the FSU.
“The FSU was conscious of the difficulties that our members are experiencing with the rising cost of living and their anxieties of an ever-changing banking sector.”
AIB's chief people officer Geraldine Casey said agreement "provides certainty on pay for our people over the coming years" and "recognises the vital contribution that our colleagues make to the success of our business".
Irish consumer prices are rising at the fastest pace in decades, as a general spike in inflation globally in the wake of the Covid-19 economic shock has been accelerated by heightened volatility across energy and other commodity markets following Russia's invasion of Ukraine. The Irish rate of inflation was an annual 6.7 per cent in March, according to the Central Statistics Office.
AIB set out early last year to axe 1,500 of its then 9,200-strong workforce by the end of 2023. That excludes the 333 Goodbody Stockbrokers employees who joined the bank last year as the securities firm was repurchased by AIB. It also does not include the hundreds of Ulster Bank staff who are expected to transfer to AIB as the latter takes over much of its UK-owned rival's loan book.
As of the end of last year, AIB employed the equivalent of about 8,900 full-time staff.
The AIB pay deal with the FSU will have the longest duration of any of those struck in the Irish retail banking sector in recent times.
Ulster Bank agreed in February to pay a 4 per cent salary increase for most of its employees, even as it prepares for waves of redundancies as it retreats from the Irish market. Bank of Ireland struck a deal weeks later for a 7.5 per cent increase over two years.
Meanwhile, Permanent TSB said on Tuesday that has agreed to pay staff a 6.5 per cent pay increase over two years.