PERMANENT TSB, the State's largest mortgage lender, has offered to pay employees up to €20,000 to take a two-year career break and up to €35,000 each for a three-year break in an attempt to reduce costs at the bank.
The bank believes the idea of a career break will appeal to younger employees among the bank's 2,500 staff, who may use it as an opportunity to travel or pursue other interests, while the bank seeks to maintain lower costs through the recession and global financial crisis.
The bank said the offer was put to staff at its head office and all its branches, with the exception of one or two business areas, last Friday as part of the bank's "flexible working environment policy".
Staff will be offered the upfront payments to a maximum level of half their annual salary.
Employees taking the offer will have to sign a non-compete clause to ensure they do not take a job at a rival bank during their break.
A spokesman for the Permanent TSB said: "This is a flexible response to manage our staff costs over the coming years and one where both the company and staff can benefit."
Most Irish banks have had a high staff turnover rate in recent years and Permanent TSB believes the offer of a career break will encourage more staff to leave.
Permanent TSB has told staff that it cannot guarantee them the same job when they return, which the bank has said is the company's general policy on career breaks.
However, the bank has said staff returning after the career break would be placed in "an equal role in the same general geographic area".
For example, if an employee worked in the bank's head office, it is likely that they would be offered a job there again after their career break.
Senior management at the bank do not view the initiative as a precursor to redundancies in the short or medium term.
Business volumes at all Irish banks have fallen sharply due to the higher cost of funding as a result of the credit crunch and the effects of the recession as the demand for loans has slumped.
The bank introduced a hiring freeze earlier this year to reduce costs.
AIB and Bank of Ireland, the State's two largest banks, have also cut their recruitment levels.
Permanent TSB's operating profits are expected to fall by about 17 per cent this year, according to estimates from analysts at stockbroking firms.
Irish Life Permanent, the bank's parent company, froze its half-year dividend pay-out to shareholders in August after reporting a 7 per cent drop in operating profits for the first half of the year.
According to the Irish Bank Officials' Association, more than 1,000 jobs have been lost to date in the banking sector as agency and temporary staff have been let go in large numbers.
