AIB staff reject cost-cutting plans

Staff at AIB have rejected plans to change pay, pensions and benefits for staff at the bank, and warned that they are ready to take industrial action.

Chief executive David Duffy earlier this month announced the bank was seeking to extend a pay freeze for staff until 2014, and would close its defined benefit for staff, moving employees to a defined contribution scheme.

The plans also include the loss of preferential rates on loans and on deposits from September 1st, and an end to allowances for club subscriptions for all staff members.

Company cars will be scrapped next year, with staff getting a non-pensionable cash payment in lieu. More than 600 top managers will take reductions of 7.5-15 per cent in their total packages.

The Irish Bank Officials Association (IBOA) said staff were "virtually unanimous" in rejecting the cuts, with the majority willing to participate in litigation to stop their implementation.

It said a "substantial majority" said they would take industrial action if attempts to force the changes through were made.

“This result should provide a wake up call for AIB’s senior management and for the Government of the Irish republic, AIB’s predominant share-holder, on the need to engage meaningfully with this union on a fair deal to stay for those staff who will be essential to the future capacity of the bank to meet the very daunting challenges that lie ahead if AIB group is to recover," said union general secretary Larry Broderick.

The union called for the board to engage with it to address the concerns of employees.

“As a responsible trade union, IBOA is willing to engage in negotiating an acceptable solution to these issues. Industrial action is always a last resort for us," Mr Broderick said. "However, our members have now given us a clear mandate to pursue such a course if the bank attempts to proceed without reaching agreement."

A delegation from IBOA, led by the general secretary, will present a letter against the proposal to the AIB chief executive David Duffy and its board at its AGM.

In response, AIB said this morning its focus was on driving down the costs of running the business. “We must continue our focus on reducing overall costs at AIB,” a spokeswoman said. “We need to ensure that the cost base of the bank is more properly aligned to the operating performance of the group while also ensuring the future viability of the bank so that over time we can generate a return to taxpayers for their significant investment in the bank.”

In a statement, AIB said that its executive committee had agreed that the pay and benefits review must be founded on a fair, equitable and tiered approach. It also revealed that the members of the committee are taking a 15 per cent pay cut, which includes salary and allowances, while bank executives take a 10 per cent reduction.