Proof that it's much more lucrative to volunteer for redundancy early on

Now that the government has control of the purse strings, redundancy severance payments in the domestic banks are likely shrink. It's questionable just how quickly this will happen, however.

The Sunday Post this week claimed that the Department of Finance has demanded that all state supported banks reduce their severance package to around three or four weeks' pay per year of service, plus statutory minimum. This would be decidedly less generous than previous pay outs, which were typically six weeks per year of service.

Bank of Ireland has so-far made 282 people redundant from the 750 job cuts it announced last year. A spokesperson confirmed that they were given six weeks per year of service plus statutory minimum. These cuts were primarily in the UK, but it seems doubtful that the 500 people earmarked for redundancy in the Republic will see the same generosity.

One BoI insider tells us that most staff in the Republic are expecting four weeks per year of service, plus two weeks statutory.

AIB is going to start implementing the 2,000 redundancies it announced earlier this year in October. So far, there's something of a wrangle over severance payments.

One senior AIB employee tells us it's a source of frustration at the bank: "The unions want to get the best deal they can for their members, the bank wants to give treat its employees correctly, but ultimately, as the majority shareholder, the government will make the decision."

Ongoing reluctance to accept voluntary redundancy

Previous voluntary redundancy programmes at Ulster Bank, Anglo Irish Bank and Irish Nationwide were over-subscribed, suggest sources. After extensive negotiations, employees volunteering for these schemes received six-weeks plus statutory, according to headhunters. It's feasible, therefore, that the three-four week offer could be the first stage of the negotiation process.

We've mentioned previously that less generous redundancy packages, combined with a lack of new opportunities, has meant that few bankers in domestic institutions have been willing to put their hand up. Perhaps it's not as simple as this, however.

Headhunters have suggested that generous redundancy packages were still being offered (perhaps up until this alleged government-called meeting), but that banks were only giving them to people they had identified for cuts.

This means that, while ostensibly these redundancies were voluntary, only a select group of people were given the opportunity to volunteer - others who may have wanted out were denied the chance.

The banks we spoke to declined to comment.

How deep will the cuts really be?

There's also the fact that Irish banks are transferring people into different job roles in order to minimise the need for redundancy.

Bank of Ireland has been redeploying people to its head office function. AIB, meanwhile, is offering credit training programmes to its employees in order to allow a transition into a workout role.

In a July message to staff, AIB chairman David Hodgkinson said the bank was "investing heavily in the important area of credit skills training as a priority".

Unfortunately, in a later message sent on 22 July, he also said "I am unable to give you any further update today in relation to redundancy terms and timing".