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Absa, BBS, Stanbic lay off over 300 employees

Bame Piet
LAYING OFF STAFF: Absa, BBS & Stanbic

Bleak Christmas for fired bank staff

The country’s youngest commercial bank, BBS Bank has joined the big banks in laying off at least 15 employees before end of December, in addition to 23 who left since March 2023.

The Voice is in possession of correspondence between the bank management and Botswana Financial Institution and Allied Workers Union (BOFIAWU).

The two parties have failed to agree on several retrenchment packages, selection process, and bank’s failure to follow its policy during the exercise and the matter went to the Commissioner of Labour on November, 23rd, 2023.

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It will be heard next year.

In one of the multiple correspondences with the Union, on 17th November 2023, the bank said it was going ahead with the separation exercise that commenced in February 2023 since this has caused prolonged anxiety on the part of staff members.

The exercise which cuts across all departments will send home an additional 15 people next week.

“You will know that in Botswana , there is no legal requirement to provide a separation package, Despite this position however, the bank found it fit to nonetheless consider one for its employees albeit during a period of challenging financial hardships,” said the management. BBS has attributed the retrenchment exercise to four years of poor performance by the bank which resulted in financial loses.

The indigenous bank was granted a banking license in October 2022.

“Based on the financial performance and operational reasons, the bank will avail the involuntary separation comprising notice pay equivalent to one month’s basic salary, accrued leave pay up to last working day, separation pay equivalent to 0.5 month’s basic salary for every year of continuous employment with BBS bank, relocation allowance at P5,000, continuation of medical cover for six months, concessionary interest rate on staff mortgage for a period of 36 months”.

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Among other things the Union had proposed a 3 months notice period, 3 months basic salary for immediate departure, an honorary exit package of P50,000; Minimum P100,000 package, medical cover for 18 months from date of departure, and a 3 months notice to vacate institutional houses.

BBS retrenchment happens soon after ABSA Bank Botswana Ltd announced a looming retrenchment of 105 managers, and an unspecified number of juniors.

According to the information gathered by The Voice Newspaper, Absa Bank had also issued intention to retrench and so far 105 employees in management positions were expected to be out of the bank’s employment by December 22nd.

These are managers who are not in the union, and the number of their juniors affected by the exercise is not yet known to the Union leadership.

“At this point we do not know how many of the Union bargaining cadre will be affected because the bank is withholding information from us,” said BOFIAWU president Mills Tlhoro.

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He accused the Bank of negotiating in bad faith ever since the start of the retrenchment exercise at the beginning of November.

Information gathered by the workers union has indicated that the Bank has offered the affected employees to opt for Voluntary Separation Scheme from 4th to 15th December 2023.

“The bank anticipates closing the process by 19 December 2023, when all colleagues whose applications have been successful, will be confirmed. Successful colleagues will be required to sign a mutual separation agreement as a condition for the termination of their contracts,” reads Circular No:04/12/2023 addressed to Absa employees.

Meanwhile, on Tuesday the Francistown Industrial Court issued an interdiction Order against ABSA at a time when 46 employees had already applied for the Voluntary Early Leavers Scheme.

“ABSA shall not proceed any further with the said VELS pending the final determination of the parties’ trade dispute in respect of VELS as lodged with the Commissioner of Labour on 7th December 2023,” reads the order dated 19th December 2023.

Among other things, the bank offers to use the VSS payment package (Service Package) to repay employees’ outstanding unsecured loans.

“In the event the Service Payment is insufficient to pay the unsecured loans, the balance remaining after applying the Service Payment will be re-amortised by the bank in accordance with applicable Company credit policies. A discount of 20% will be applied on a minimum settlement of 80% of the outstanding balance on unsecured loans,” reads the Absa offer. However, the Union argues that the bank is engaged in an unlawful act of withholding the package to settle loans without the consent of the affected employees.

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The parties have not agreed on many issues and the matter is now before the Commissioner of Labour and will be heard on 14 May, 2024.

Responding to a question in Parliament last week, Minister of Employment and Labour Productivity Anna Mokgethi said the fact that the banks have recently reported huge profits does not mean they cannot retrench.

“It is worth indicating that in compliance with Section 25 [2) of Employment Act, Cap 47.01, the two banks have notified the Commissioner of their intention”.

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The minister added that the restructuring exercise at Absa and Stanbic is still ongoing and the Commissioner will be notified.

“To date, no employees have been terminated from the two Banks because of the restructuring exercise,” the Minister said.

Meanwhile, the Union has confirmed that Stanbic Bank retrenched close to 100 employees at the end of November.

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