Pay hike on horizon for 5,500 AIB staff

Michael Noonan’s Department of Finance faces having to endorse a looming pay rise agreement in the coming weeks for 5,500 staff at AIB, the lender bailed out at a cost of €20 billion to taxpayers.

Finance union — the IBOA — yesterday said it was hopeful of securing agreement with AIB for a pay rise and regrading package — the first at the bank since the crisis struck in 2008.

The dispute was referred yesterday to Labour Relations Commission independent mediator Kevin Foley, but the IBOA said it was hopeful by the end of the month that the LRC will have signalled that a compromise pay and regrading agreement was possible.

“There is enough keeping us apart that it was not possible for the two sides to reach agreement at this time,” an IBOA spokesman said.

Union sources said Government-ownership of AIB added another layer of complexity to the negotiations.

AIB said the bank has been in talks with the IBOA for several months. “As part of these discussions, a number of items have to be taken into account, including the bank’s operating performance and the ability to generate returns on the capital invested by the Irish taxpayer. AIB approaches engagement on all of these of matters in a spirit of co-operation with our unions,” a bank spokesperson said

IBOA sources said it was seeking a similar deal that it struck for up to 5,000 staff it represents at Bank of Ireland. That deal provided pay rises of 2% and 3% across two stages last December and January, and allowed for the shrinkage of about 360 staff grades to about 30 grades to the benefit of most staff, the IBOA said.