Needless to say, it no longer pays to be made redundant by AIB or Bank of Ireland

There was a time when voluntary redundancy was a good bet in Ireland. AIB’s voluntary redundancy programme last year was oversubscribed when the bank allegedly offered generous terms for those leaving.

Last June, we were told AIB was offering eight weeks pay per year of service, with a maximum of 2.75 years’ taken into consideration, even thought the statutory minimum was only two weeks per year of service. Bank of Ireland was understood to be offering the same, with a cap of 2.5 years.  The Independent reports that 701 people made redundant from state-rescued Irish banks received redundancy payments totalling  €56.8m last year, or an average of €81k each.

Unfortunately, those days are over now. Earlier this week, the Irish government said it will restrict redundancy payments at nationalized banks to the level of other public service workers in Ireland: namely a maximum of 5 weeks’ pay.

Any of the 2,000 people being made redundant by AIB this year are therefore likely to receive a payoff nearly 40% lower than their colleagues who left in 2011.