Lawyers Advise Sacked Staff To Seek Redress In Court' AMCON Urged To Be More Visible In 'Arbitration'LABOUR crisis has continued to resonate across the banking industry, especially in the bridge banks ' that of the Mainstreet being the most visible due to the media bliss it currently enjoys.Last week, stakeholder (federal government) ministries 'Finance/Labour and Productivity ' as well as the Central Bank of Nigeria (CBN) and the Asset Management Company of Nigeria (AMCON) met with contending parties to resolve the lingering disagreement (over disengagement benefits) between the Mainstreet Bank and about 700 of its recently sacked staff, who formed a united front against a 'common enemy'.Even that move in itself has stirred reactions, especially from legal practitioners, who, at the weekend, advised aggrieved ex-bankers to seek redress in the court of law if the peace process failed to yield positive results.In divergent shades of opinion, Chuks Nwachukwu, of the Indemnity Partners, and Colin Okeke, Senior Legal Officer, Human Rights Law Service, in separate interviews with The Guardian, canvassed this position, saying the aggrieved ex-bankers could get justice through the legal system if their employer failed to address the issue in a satisfactory manner.The affected bankers, most of whom were 'inherited' from the legacy Afribank, had vowed to fight for their full entitlements in line with extant labour laws and terms of contracts. Arguing that the exit package did not reflect the years of service in the defunct Afribank, the sacked staff had initiated and sustained a media war over the manner they were relieved of their jobs, without adequate compensation and severance benefits.During a protest march to the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI's) office in Ikeja, Paschal Ndukwe said he was 'unhappy with the injustice meted against us. When they took over, they told us to reapply to join Mainstreet. They forced the decision on us. And we did re-apply unknown to us that they were waiting for the right time to disengage us without settlement.'It was revealed that staff, who, willingly joined from Afribank, were placed on another round of probation (which commenced on August 5, 2011) and assumed to be fresh employees. Until June 22 when they were asked to go, their appointments were neither confirmed nor their probation extended.A collective agreement reached by the Nigeria Employers' Association of Banks, Insurance and Allied Institutions (NEABIAI) and ASSBIFI says: 'On engagement, an employee covered by this agreement shall serve a probationary period of six months subject to satisfactory performance. Such period may be extended by a further period not exceeding three months.'Where the work or conduct of a probationer is not of standard required by the employer, he shall be advised in writing of his shortcomings at intervals of three months during his probationary period and thus placed on notice that improvement is required.'While the aggrieved staff spent over nine months (maximum time probation should run according to the industry labour agreement) without confirmation, they claim there was no communication on why they were left unconfirmed. However, there was no evidence to prove that the staff formally raised the issue with the management until they were relieved of their jobs.Akintola Oladeinde, a former senior manager, faulted the dismissal, saying, 'it did not follow laid-down rule which says you must face disciplinary committee before your job can be terminated. If it were on appraisal, which was never done in Afribank, we should have been formally written before the termination.'We agreed when they said anybody could be terminated through appraisal; but at least your immediate boss must rate you poorly before you could be asked to go. My boss gave me over 70 per cent in a recent appraisal. Can a school fail a student whose teacher scores 90 per cent'Industry sources, at the weekend, wondered why AMCON, which currently owns the bridge banks, had waited for so long. 'It is not convenient for AMCON to stand aloof since it has acquired all the assets and liabilities of the bank,' the industry enthusiast told The Guardian.AMCON Director-General, Mustafa Chike-Obi, was, in a recent interview, quoted as saying that the workers could have lost 'everything', if Afribank had been liquidated.'It is a difficult issue,' he said, 'because it has the legal side and the human side. The legal side is that the old bank 'talking about the legacy bank of Mainstreet Bank (Afribank) ' is an institution that has been wound down. If this bridging and subsequent recapitalisation had not happened, Afribank would have been liquidated and, legally, those employees, including all other ones that have new terms of employment would have lost everything.'Chike-Obi noted that the Nigeria Deposit Insurance Corporation (NDIC) and the CBN went through the bridging process to avoid untold hardship on depositors and the workers.'This is what people should understand. If banks had been liquidated, all employee benefits (all these things people are now claiming) would have been secondary to the depositors; and it is only when depositors get whatever they can get that anything left over will go to these people.'This is because all these stocks were lost. So the legal position is that Afribank employees, who are not the same as Mainstreet Bank employees (because they had no employment contracts), were victims of a liquidated bank as it were. That's the legal side.'But the human side is that people have worked, people have earned whatever it is they are entitled to, and so I think from the human side, it will be good if there is a way to come up with a reasonable middle of the ground answer. It does not help if the either side takes an extremist view of the matter. At this point, I will say these banks are new entities, they do not have the legacy obligation as a matter of law but I think that both sides should talk and come up with a middle approach looking at the human side.'Meanwhile, the bank argues that the sack was not based on redundancy but was clearly a fallout of staff performance appraisal exercise.CONSEQUENT upon its (stress test) audit of some Nigerian banks, the CBN had, on August 30, 2009, declared Afribank as being in grave situation, saying that its liabilities far outstripped assets. According to the regulator, the bank was almost insolvent.Of course, the bank, in the estimation of the CBN, subsequently failed to recapitalise and improve its financial situation, in line with imposed criteria. The result was that the Nigeria Deposit Insurance Commission (NDIC) incorporated, Mainstreet Bank Limited, an entirely new entity, to take over Afribank's assets and (some) liabilities.To effect the transfer of the assets to Mainstreet Bank, the NDIC, as statutory transferor, executed an instrument transferring all deposit liabilities, certain other liabilities and all assets of Afribank to Mainstreet Bank.However, the bank recently stressed that certain liabilities ' including pension liabilities and gratuities ' were not transferred to it, pursuant to the said instrument of transfer. 'Thus, the liabilities that were not assumed by Mainstreet Bank remained with the defunct Afribank.'According to the bank, in recognition of the unfavourable economic conditions and hardship, which may be occasioned by the disengagement, the Board 'graciously' decided to pay certain benefits to the employees who were being disengaged by the bank even though such payments did not form part of their entitlements under their contracts of employment.'In this wise, the disengaged members of staff were granted certain 'ex-gratia benefits', which included additional two months basic salary.It also wrote off outstanding share loans taken by the disengaged staff to fund acquisition of shares. Outstanding car loans were also written off even as the disengaged staff were allowed to retain their status cars.The bank further noted that, in accepting the ex-gratia benefits, the disengaged members of staff signed an undertaking acknowledging that the ex-gratia payment was not based on any contractual right, and that it was not to be construed as a severance payment, which, according to the bank, the disengaged employees were not entitled to.In what it regarded as a transparent move to safeguard the interest of the members of staff whose employment were to be terminated, the bank said it engaged industry trade unions 'ASSBIFI and the National Union of Banks Insurance and Financial Institutions Employees (NUBIFIE) ' intimating them of the plans and obtaining their buy-in to the whole disengagement exercise.It also insisted that the CBN and AMCON, as the majority shareholder of the bank, were privy to the entire process.'Mainstreet Bank operates in a highly competitive and dynamic industry with attendant consequences for players in the industry. Thus, in order to guarantee the survival of the bank in the face of ardent competition in the banking industry and to ensure that the bank remains competitive in the industry, it is imperative that the bank maintains a quality of staff members that will deliver and take it to the desired level.'Thus, further to the engagement of the members of staff and in line with the contracts of employment of the employees, the bank conducted a performance appraisal exercise to determine the suitability of all staff under probation. Accordingly, members of staff that met the confirmation criteria were confirmed; staff that met and exceeded confirmation criteria were recommended for promotion and staff whose performance fell below the expectations of their level were disengaged by the bank in accordance with the terms of their employment.'The members of staff, who were disengaged, were given their one month's salary, which they were entitled to by virtue of their contracts of employment.'The Management, which recently clocked one year in office, alleged that it 'resumed duty in a bank, which had no clear strategy, and was grappling with diffused market focus and consistently returned losses for many years.Over 90 percent of the branches were said to be making loss. The management also claimed that it inherited an 'aged workforce with huge skill gaps, epileptic Information Technology infrastructure, poorly implemented Organisational Model, high cost-to-income ratio, weak policies and processes, poor expense management, high non-performing loans (NPLs) and poor performance management impeding accountability and ownership.'There was the urgent need to douse tension and assure the employees of job security; hence, the management' took the employees through townhall meetings on the need to rebuild the bank, following which all staff of the legacy bank were reabsorbed, as allegedly directed by its stakeholders.Subsequently, the workers were issued with new employment offer letters with terms and conditions that included a six-month probationary period. The bank now claims that move was to avert labour issues at the time and to create a workforce with an imbibed loyalty culture and commitment.AMID the disagreement therefore, Nwachukwu, a lawyer, said, 'it is very easy to tie the assets of Mainstreet Bank with the entitlements of the ex-workers. It is either the bank pays, or it is liquidated. It amounts to a fraud to take the assets of Afribank while you are not ready to pay the entitlements of the staff you inherited.'They should not have been placed on another probation in the first place. How can you place somebody who has worked in the same organisation for 30 years on another probation' They were stupid to have accepted to be on probation after many years of service; the two are contradictory. Out of looking for short-term advantage, they compromised their rights.'Nwachukwu argued that the issue could only be addressed on the legality, or otherwise, of the process through which the Afribank ex-workers were reabsorbed by the new owners, even though he agreed that the workers could have safely rejected the new job offer.'When you bridge a bank, the new brand carries the liabilities of the old. These include pensions and other entitlements,' he said.Another lawyer, Okeke, agreed that the dissatisfied ex-workers could explore different labour laws to claim their rights.He, however, noted that, by signing a new contract, they, inadvertently, agreed to waive their outstanding entitlements as staff of Afribank.'If they were given fresh employment letters, violation of their rights could only be addressed based on the new contract. The terms of the contract might have been changed. Without knowing, they must have waived their entitlements as workers of the defunct bank. Did they raise the issue of entitlements before signing new contract' You don't sign any contract on presumptions; all issues must be clarified.According to Okeke, 'if the workers were to arbitrate or litigate on what transpired, 'it has to be based on the new agreement. You don't expect the new owner to pay entitlements of former bank because ownership has changed. They should have insisted that the bank could not be handed over until they were paid their entitlements,' he said.He observed that it was possible that former and current owners did not consider the entitlements of the previous workers as liabilities. He said it is a puerile to argue that the entitlements were part of the transferred liabilities if the two parties did not think the same way.On the controversy surrounding the probation that extended beyond the statutory nine months, he said they should have raised the issue at the end of the six months rather than wait to be laid-off before questioning it.
Click here to read full news..
