Ulster Bank improves terms of redundancy offering amid market exit

New terms propose exiting staff receive five weeks’ pay per year of service

Ulster Bank is preparing the ground for eventual job losses as part of its phased withdrawal, improving the terms of its general redundancy offering.

The lender reiterated in a press statement on Friday that it does not plan any compulsory redundancies this year, while it told staff in an internal email that it does not envisage any bank-wide voluntary scheme in 2021, according to sources.

This leaves open the prospect of targeted redundancies among its 2,800-strong workforce in the Republic during the current year.

The new terms agreed with the Financial Services Union (FSU), subject to ballot by workers, propose that exiting staff receive five weeks' pay for each year of service, inclusive of statutory entitlements, or four weeks' per year, plus statutory, depending in which is greater.


Previously, it offered four weeks’ pay per year, inclusive of statutory entitlements.

Redundancy packages are capped at 104 weeks and a monetary amount of £300,000, which currently equates to €349,250. A minimum payment has been set at 20 weeks, regardless of service.

The bank has previously committed to seek to transfer as many jobs as possible with its sale of loan books. AIB is currently expected to take on about 300 Ulster Bank employees as talks continue for it to acquire €4 billion of corporate and other business loans. Permanent TSB (PTSB) is also in negotiations to buy some of Ulster Bank's other €16 billion of loans as well as part of its branch network and some deposits.

‘Significant milestone’

Analysts say PTSB is most likely to be interested in Ulster Bank’s non-tracker mortgage loans and its remaining small-business portfolio, totalling about €9 billion.

"This agreement is a significant milestone in Ulster Bank's phased withdrawal and, while it is subject to ballot, I am confident that with the support of the Financial Services Union, we have developed a comprehensive, colleague-focused agreement which will underpin our principles to withdraw in a fair and responsible way for colleagues, customers and stakeholders," said Ulster Bank chief executive Jane Howard.

NatWest confirmed in February that it will be carrying out a "phased withdrawal from the Republic of Ireland over the coming years that will be managed in an orderly and considered manner", as the unit was unlikely to be able to produce sufficient profit returns for the foreseeable future. Ulster Bank Limited's banking business in Northern Ireland is unaffected.

“The last few months have been very difficult for staff. The main concerns of the FSU were to ensure the application of TUPE legislation and to negotiate improved redundancy terms for our members,” said Gareth Murphy, the FSU’s head of industrial relations and campaigns, referring to transfer of undertakings regulations covering where employees move with the sale of assets.

FSU members will proceed to ballot on these proposals over the coming weeks with a result to be known in July, he said.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times