Staff in AIB are set for a pay increase that is expected to comprise two parts, one tied to individuals' performance and a flat rate linked to the rising cost of living.
AIB's interim chief people officer, Gareth Cronin, informed staff in an email on Tuesday that the group had concluded pay and reward discussions with the Financial Services Union (FSU) at the Workplace Relations Commission (WRC).
“We are awaiting a recommendation from the WRC and we will share it with you when it is published later this week,” Mr Cronin said. “The recommendation will then be subject to an employee FSU ballot which will be held in the coming weeks.”
A recently-expired deal entitled AIB staff to an average 2.75 per cent pay increase in both 2017 and 2018. The increases were tied to performance. However, the FSU is known to have been lobbying strongly for a new agreement to comprise a performance-related pay increase as well as a flat rate for employees linked to inflation.
Staff grades
Meanwhile, AIB is pressing ahead with plans to disband its complex web of staff grades and replace it with a streamlined career structure from July in order to simplify the organisation and improve transparency and consistency. It is understood that the new system will comprise seven levels, from entry-level positions to the role of chief executive.
The plan “will also give us an opportunity to ensure our reward structure is fit for purpose and future-focused,” Mr Cronin said.
The pay increase plan comes as the Department of Finance considers an early working draft of a Government-commissioned report into remuneration across the sector, which has been submitted in recent weeks.
It is widely expected that the final report, being written by headhunting group Korn Ferry and expected in the coming months, will recommend a relaxation of rules which have limited salaries and effectively banned bonuses across bailed-out Irish lenders for the past decade.
The top salary at most rescued banks has been capped at €500,000, while bonuses of more than €20,000 are subject to a levy of 89 per cent.
Minister for Finance Paschal Donohoe told the Dáil shortly before Christmas that the restrictions were putting the country’s three surviving banks, in which taxpayers have stakes, at a disadvantage when it comes to hiring and retaining staff.
"We now have a vast array of companies located here in Ireland that are paying significantly more than Irish banks are to their staff," Mr Donohoe said on December 18th.
