Ulster Bank expects to begin pay talks with staff "shortly" for a period covering the next two years.
The bank, which returned to profit in the first half of this year, also announced today that it has accepted the recommendations of an independent mediator on an “organisational change agreement” out to the end of 2016.
The Irish Bank Officials Association gave a cautious welcome to the recommendations saying they required "further clarification with both the mediator and with management".
The recommendations, which followed more than four months of talks between senior management and the IBOA, were drawn up by Mark Connaughton, a senior counsel, and cover the terms and processes that will govern plans by Ulster Bank to restructure its operations on the island.
This is expected to include retail branch closures and a rationalisation of business hubs, head office "re-sizing", insourcing and outsourcing, the alignment of Ulster Bank in Northern Ireland with its sister businesses in Britain, a revised business model in the Republic, and a run down of certain asset portfolios.
In terms of redundancy payments, the bank will offer four weeks pay per year of service, inclusive of statutory entitlements, subject to a cap of 104 weeks and £300,000. A training grant of up to €2,500 will also be made available to departing staff.
Ulster Bank has agreed to make a “limited” early retirement scheme available for up to 40 staff of age 55 or above. This will provide for an “immediate discounted pension” plus a lump sum based on 1.25 weeks of pay per year of service. It will be available to members of its defined benefit pension scheme.
All changes will be “volunteer-led” and the mediator’s report also deals with staff terms for those moved to a role on a lower grade. Redeployment opportunities are to be made available to staff while departing employees will be expected to work their full notice period.
Ulster Bank employs about 5,600 staff on the island but is planning to reduce this to about 4,000 to 4,500 over time.
In July, it announced plans to close 15 branches and sub-offices across Ireland by November. This would reduce its number of locations to 199 and is the first step in a wider plan to reduce its network to between 175 and 185 locations.
These measures follow a strategic review by its parent company Royal Bank of Scotland. The UK bank has also been testing the market for potential merger or investment opportunities for Ulster Bank's business in the Republic.
Commenting on the recommendations, Ulster Bank said: “This agreement is made against the backdrop of the new banking landscape, as well as evolving customer behaviour in quickly changing markets.”
It said the agreement was part of Ulster Bank’s “ongoing strategy to build a sustainable, more agile, customer-focused bank”.
The bank said the deal this would provide assurance to staff that changes would be facilitated on a “volunteer-led basis”, where possible, recognising that “these will happen over a period of time and reflects our commitment to being a good employer”.
IBOA general secretary Larry Broderick said: "Our IBOA Ulster Bank executive committee will meet early next week for a detailed consideration of the recommendations, and of the feedback from our members before deciding its formal response.
“We recognise, that even if there is no change in the ownership of Ulster Bank’s business in the Republic of Ireland, our members throughout the island are facing into another period of profound change. So we will aim to ensure that the change process is managed as carefully and as fairly as possible.”
