Staff at AIB are in line for pay rises of up to 10 per cent and a 5 per cent profit share payout following the bank's announcement yesterday of record profits of €1.7 billion for 2005.
As the national pay talks continue between the Government and the social partners, a report by the Labour Relations Commission (LRC) will today recommend a new salary structure for the bank's 8,000 staff in the Republic.
The level of pay awards made by financial institutions are regarded as significant for pay levels in the economy generally.
Kevin Foley, the director of the LRC's conciliation services division, is expected to recommend that AIB's staff should be awarded pay increases well in excess of the national wage agreement. It will also recommend that some staff be entitled to earn significantly improved bonus payments as part of their remuneration.
The report follows two years of consultations between AIB and the Irish Bank Officials' Association which represents the majority of AIB's staff in Ireland and was undertaken in response to the shift within the bank towards more target-driven roles for its workforce.
The IBOA has complained that staff are increasingly being set very aggressive targets and have had to forfeit performance-related aspects of their pay when they fail to meet them.
The recommendations will be circulated over the coming days to AIB staff who will be asked to approve them in a ballot in the coming months. If accepted, the recommendations are expected to significantly improve the entry-grade pay, which currently stands at €20,000. It would also usher in pay rises for all staff.
AIB's staff in Ireland and the UK will each also receive a payment equivalent to 5 per cent of their annual salary under an improved profit share award.
The Republic's biggest bank, which yesterday reported a 23 per cent rise in profits to €1.7 billion in 2005, has increased its profit share award from 4 per cent to 5 per cent this year following negotiations with the IBOA.
Its general secretary, Larry Broderick, said it was pleased the bank had taken this issue on board and put a structure in place for the future. "AIB is one of the most profitable financial institutions in Europe and the IBOA has consistently argued that staff should be given an opportunity to share in the success of the organisation," Mr Broderick said. "It is the staff who through their hard work and increased productivity that has led directly to the bank's massive profitability, and it is only right that staff are properly rewarded."
The IBOA has made representations to other banks on the issue of profit share and has also raised it at national level as being central to its support for any future national wage agreement.