A trader in Allied Irish Banks' capital markets division who sued over failure to pay a €161,000 bonus for his performance during 2008 has secured liberty from the Master of the High Court to enter final judgment for the sum against the bank.
At least 90 similar actions are pending against AIB involving claims likely to exceed €10 million.
John Foy, who was employed in 2005 on a basic salary of €75,190 a year, claimed the failure to pay the 2008 bonus was causing him and his family "unjustified hardship" as it formed most of his remuneration.
Mr Foy is one of 90 traders in the division who have taken similar actions arising from the bonuses, which vary in amounts, being withheld under the government's bank guarantee scheme. AIB has also not paid the staff bonuses for 2009 and may face further proceedings over that.
AIB did not oppose the making of the order in favour of Mr Foy today 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 but, after legal actions were initiated by overseas capital markets staff, it did pay "contractual bonus entitlements" for 2008 to those staff and other foreign units.
Employees of the capital markets division (CMD) in Ireland were told on various occasions since early 2009 the bonuses were being deferred and most initiated their actions from last summer.
In his proceedings, Mr Foy said he began employment with AIB in early 2005 as a dealer in the CMD and was made permanent in April 2006. His contract included a provision for an annual bonus payment and bonuses were paid to him during the years 2005-2007 inclusive.
Mr Foy said he was notified in January 2009 by Michael Cronin, his line manager in AIB, 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 Colm Doherty, then managing director of AIB and then head of the CMD, had told staff in April 2009 the bonuses for 2008 would be paid as the bank was contractually obliged to do so. AIB's overseas employees were also paid their contractual bonuses for 2008, he said.
AIB's annual report for 2009, published in March 2010, stated the 2008 bonuses had not been paid in the Republic but were paid to staff outside the Republic. The bank also stated it had, on legal advice, made an accrual against the future payment of deferred 2008 bonuses, the timing of which would be subject to the approval of the AIB Board and the Department of Finance.
Mr Foy said he wrote to AIB on March 26th last seeking payment of the 2008 bonus and stating there was no basis for the involvement of the Department of Finance in determining when or if that bonus would be paid.
AIB's head of human resources John Conway had replied the payment of any bonuses required approval of the Department and that approval was not forthcoming.
Mr Foy replied stating the Minister for Finance had repeatedly stated the government had no involvement in the remuneration policies of banks below board level but Mr Conway reiterated in a further reply the Department had to approve bonus payments.
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.
