Bank of Ireland today condemned the threat of a one-day strike by the IBOA as completely unwarranted and against the interests of the Bank’s staff and customers.
The Bank said the 3% award of Bank shares to staff at a cost of over €20 million was fair and equitable for all stakeholders in the Bank and entirely consistent with the agreement on the Strategic Transformation Programme.
The awarding of Bank of Ireland shares to staff is a bonus payable on the achievement of certain targets. The Bank has honoured the staff contribution to the cost saving programme by paying the 3% of salary due for that achievement but cannot pay the second 3% as the earnings targets were not met. To pay the full 6% when the targets were not met would defeat the purpose of this bonus scheme, the Bank added. Prior to this year Bank of Ireland employees have already benefited from two payments of 6% of salary, a 35 hour week and a generous voluntary redundancy programme as reward for the achievement of cost savings under the Strategic Transformation Programme.
The Bank also said it was irresponsible to contemplate industrial action at this time given the difficult business environment in Ireland and internationally. “This threatened action by IBOA shows the union is completely out of touch with the business and economic realities and is completely disproportionate to the issue involved.”
The Recommendations of the Facilitator on the Implementation of the Strategic Transformation Programme (known as the Mulvey Agreement) set out clearly that there were two elements required to trigger the Staff Stock Issue of “up to 6%”:
Section 4: Recognition Payments, Related Change and Co-operation “The achievement of the targets and objectives will deliver real tangible benefits to staff in each year of the Plan/Programme, on a tax efficient basis, based on earnings per share growth and the attainment of the cost goals.”
The conditions for the earnings per share element of the Staff Stock Issue are set out in Bank of Ireland’s annual report:
“Each year the Court of Directors may set aside an element of Group profit before taxation for allocation to the trustees of the scheme to enable them to acquire units of Ordinary Stock on behalf of scheme participants. The amount set aside is related to overall Group performance assessed in terms of real growth in underlying earnings per share (“EPS”) and cost savings achieved under the Group’s Strategic Transformation Programme.”
The term “real growth” refers to growth adjusted for inflation. Underlying earnings per share for Bank of Ireland Group for the year to end March was 4% while inflation was 5%.
Head of Group Corporate Communications
Bank of Ireland Headquarters, Baggot Street, Dublin 2
Tel: Office +353 1 6043833
Mobile: + 353 86 2412470