National Irish Bank pay review process on hold

A pay review at National Irish Bank was put on hold in April 1998, pending the outcome of a major crisis over alleged overcharging at the bank.

A review of remuneration at one of Ireland's smaller banks, National Irish Bank (NIB) - a subsidiary of the National Australia Group- has been put on hold following a major scandal involving the overcharging of accounts in a number of branches. The NIB has acknowledged that overcharging took place and there are currently a number of inquiries into the matter, including one established by the Government.

The NIB's latest pay review had reached the conciliation service of the Labour Relations Commission (LRC) with the next step expected to involve a referral to an independent and jointly-established management/union tribunal. However, in talks during early April 1998 involving the head of the LRC's conciliation service, Ray McGee, both the NIB and the Irish Bank Officials Association (IBOA) agreed to formally adjourn the review process until the implications of the wider problems affecting the bank are played out.

One of the key problems with the pay review is that the bank would like to see a strong element of performance-related pay built into any new pay structure. Given recent revelations, performance-related pay, which was unpopular with IBOA members anyway, has come under further suspicion. It is felt that performance demands may have placed some bank personnel under undue pressure and led to the practices which were recently exposed. The IBOA said that a number of concerns have been highlighted by its members recently, including a general "lack of trust of management " and a "deep suspicion of performance-related pay."

Given the recent controversy surrounding the bank, the parties agreed that it would be appropriate to adjourn the pay review process for the time being. When it is revisited, the performance-related pay element may well need to be looked at again.

Morale at NIB is at an all-time low given the revelations which have placed the Irish banking sector under suspicion generally. Most of the NIB staff were as unaware as the general public about what had been going on until Ireland's national broadcaster, RTE, revealed the overcharging practices.