Ulster Bank has reached an agreement with the Financial Services Union (FSU) on improved redundancy terms, according to statements from the two organisations.

It follows a decision from Ulster Bank owner NatWest Group to begin a phased withdrawal from the Republic of Ireland.

Ulster Bank says there will be no compulsory redundancies from the business this year.

Included in the new proposed redundancy terms are five weeks pay per year of service inclusive of statutory or four weeks pay per year of service plus statutory, whichever is greater.

The redundancies will be capped at two years’ salary or £300,000, which ever is the lower figure.

Ulster Bank employees will receive 20 weeks minimum pay inclusive of statutory redundancy pay regardless of length of service.

In addition, staff will be given a €5,000 retraining grant or as a pension additional voluntary contributions.

The bank has also committed to discussions on potential transfers of employees – through the Transfer of Undertakings legislation (TUPE) – to other banks that may potentially buy some of Ulster Bank’s portfolio.

An ex gratia long service payment of £4,700/€5,000 for colleagues with service of 25 years to less than 30 years will be given to staff where applicable.

Those with more than 30 years service with the bank will receive an additional £7,050/€7,500.

Gareth Murphy, FSU’s head of industrial relations and campaigns, said: “The last few months have been very difficult for staff. The main concerns of the FSU were to ensure the application of TUPE legislation and to negotiate improved redundancy terms for our members.”

Mr Murphy added that the union has tried to accommodate the different priorities of its members into one collective agreement.

FSU members will ballot on these proposals over the coming weeks with a result to be known next month.

Ulster Bank said it will continue to keep colleagues and their representatives updated as the withdrawal progresses further.

Ulster Bank chief executive, Jane Howard said: “This agreement is a significant milestone in Ulster Bank’s phased withdrawal and while it is subject to ballot, I am confident that with the support of the Financial Services Union, we have developed a comprehensive, colleague-focused agreement which will underpin our principles to withdraw in a fair and responsible way for colleagues, customers and stakeholders.”