Dublin: A report on bankers' pay by Mercer for the Irish Government has provoked a furious response from bank staff.
The main Irish bank union has condemned Government demands, on the back of the Mercer review, that Irish banks reduce their remuneration costs by up to 10 percent.
Some 30,000 staff of Bank of Ireland, AIB and Permanent TSB are facing cuts in their pay and pensions after Minister for Finance Michael Noonan directed the banks to reduce their remuneration bill by 6-10 percent.
Minister Noonan's intervention followed publication of Mercer's report by his department, which showed that average salaries for "continuing employees" — staff who were in place in 2008 — has increased by 4-16 percent in the past five years.
Noonan commented, "We now have the factual position on bankers' remuneration from end 2008 to late 2012 placed in context and this will enable a true evidenced based policy to be developed and implemented in consultation with the various stakeholders."
As a result, he said he would be, "directing the banks to come up with plans as to how they intend to address this issue in a manner that can help meet the State's objectives. I expect the value of those plans to mean a saving of 6% — 10% of total remuneration costs, through reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains."
However, The Irish Bank Officials' Association, IBOA rejected the Government's call. "The Government's demand for further cuts is totally unacceptable," said IBOA General Secretary, Larry Broderick, "and cannot be justified even on the basis of the partial evidence of its own 125-page report."
The IBOA argues that the Mercer report points to a significant reduction in total remuneration costs at bank level between end 2008 and late 2012 — noting that average total remuneration for continuing employees has fallen by a range of 6% to 11% at Bank of Ireland, Allied Irish Banks, and Permanent TSB.
"Like many other workers, bank employees have taken considerable pain in recent years — in the form of significant reductions in remuneration as well as substantial jobs cuts. It has been estimated that around 10,000 banking jobs have been lost since 2008 as the banking sector attempts to recover from the disastrous policies pursued by senior executives in major institutions. This equates to over 20% of the workforce in the sector. This figure is set to rise in the next couple of years as thousands more jobs are at risk.
"Overall, it is IBOA's view that the Government is being opportunistic in seeking to impose further salary cuts at this time. This approach would significantly hinder the overall objective of getting the banks back into profitability."