AIB faces possible €10m bill after bonus award

A TRADER in Allied Irish Banks’ capital markets division who sued over failure to pay a €161,000 bonus for his performance during the year 2008 has secured liberty from the Master of the High Court to enter final judgment in that sum against AIB.

At least 90 similar actions are pending against AIB involving claims likely to exceed €10 million.

The failure to pay the 2008 bonus was causing him and his family “unjustified hardship” as it formed most of his remuneration, John Foy, who was employed in 2005 on a basic salary of €75,190 a year, claimed.

Mr Foy is one of 90 traders in the division who have taken similar actions arising from the withholding of bonuses under the Government’s bank guarantee scheme. AIB has not paid staff bonuses for 2009 either.

AIB did not oppose the order in favour of Mr Foy yesterday by the Master of the High Court, Edmund Honohan. The action by Mr Foy, of Newhaggard Lane, Trim, Co Meath, is regarded as a test case for the other claims and, in reply to Master Honohan, Conor Kearney, for Mr Foy, said other claims were pending.

AIB ceased paying bonuses after a Government-appointed committee recommended no bonuses be paid for 2008 and 2009. After legal actions were initiated by overseas capital markets staff, it did pay “contractual bonus entitlements”.

Employees of the capital markets division in Ireland were told bonuses were being deferred and most initiated their actions last summer.

Mr Foy said he was notified in January 2009 by his line executive Michael Cronin that his contractual bonus for 2008 would be €160,000, which would be paid in full in February 2009. He was later told payment was being deferred until further notice.

Mr Foy said former AIB managing director Colm Doherty, then head of capital markets, had told staff in April 2009 the bonuses for 2008 would be paid.

Mr Foy said he wrote to AIB on March 26th last seeking payment of the 2008 bonus. AIB had never denied the bonus was due and owing but had sought to delay payment on the basis of its dealings with the department, Mr Foy said. This was causing “unjustified hardship” to himself and his family.