BANK of Ireland plans to withhold €24 million in staff share bonuses in a move that could cause industrial strife.
The bank’s senior executives recommended the staff stock issue for its 16,000 employees should be cut from 6% to 3%. The Irish Bank Officials Association (IBOA) said that was despite the bank’s annual group profits which, at almost €1.8 billion, were up 6% on last year.
The average senior bank official earns €50,000 a year. Annually, that official would receive an additional 6% of salary — €3,000 — in shares under the staff stock issue.
If the worker decided to sell the shares in the three years after receiving them, he or she would pay tax on the sale. However, if retained for three years, the shares could be sold tax-free.
The recommendation by the bank to cut the issue in half will take the value of shares given to the average staff member down to just €1,500.
“The staff stock issue is a gain-sharing arrangement which was agreed as part of a massive rationalisation programme in Bank of Ireland in 2005,” said IBOA general secretary Larry Broderick. “In return for major productivity increases arising out of a total of 2,100 jobs cut, the cost and capability plan, as it was known, provided for a staff stock issue of 6% until 2009.
“As far as our members are concerned, they have already given the required productivity under the plan. To turn around now with a proposition to cut the level of the gain-share for staff is simply welching on the deal.”
The deal on the staff stock issue was facilitated by industrial relations expert Kieran Mulvey, and Mr Broderick pointed out that in his recommendation Mr Mulvey said: “I am of the view that unless unforeseen circumstances arise whereby the bank fails to continue in its growth trajectory and fails to meet its cost objectives, the targeted level of increased staff stock issue will be achieved. In order to provide greater certainty on this issue, I recommend that in the event of a less than 6% stock issue being contemplated, then the matter should be referred to me for determination.”
“IBOA has now referred the matter to Mr Mulvey in line with the terms of the original agreement,” said Mr Broderick.
Meanwhile, Unite trade union said it was considering a ballot for industrial action up to and including withdrawal of labour.
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