In the latest instalment in the Irish banking fiasco, Allied Irish Banks (AIB) has announced it will cut over 2,000 jobs. The proposed cuts come after AIB posted a record €10.4 billion net loss on continuing operations for the previous year. This was a huge increase in loss from the €2.3 billion loss reported in 2009.
The large number of redundancies is part of a major restructuring of the bank that was expected by analysts to come following the announcement of the loss. In the current economic climate, such a large number of employees made redundant in Ireland could make it difficult for them to find new employment easily.
AIB, in a statement released this morning, said that the redundancies "will take place on a phased basis over 2011 and 2012".
IBOA, The Finance Union, the largest trade union in Ireland's banking sector, has recently sought urgent talks with the Minister for Finance, Michael Noonan, to discuss the implications of the restructures. The General Secretary of IBOA, Larry Broderick, earlier shared the view held by many members of the public, that "ordinary bank staff should not be made scapegoats for a short-term cost-cutting agenda."
However, under Irish employment law AIB will have to ensure that the employees' legal rights are met. AIB must provide the Minister for Enterprise, Trade and Innovation with notice of the proposed redundancies. Irish employment law also imposes obligations on AIB to consult with its employees and their representatives.
No doubt the IBOA will have an important role in ensuring AIB meets its obligations to its workers. Ensuring that employees receive appropriate redundancy entitlements will be an important priority.
AIB executive chairman, David Hodgkinson, said the bank should be "reasonably generous" when it comes to redundancy packages offered to employees.
Read more on the story (BBC)
Read more on redundancy law (FindLaw)
Find local employment solicitors throughout the UK (FindLaw)