Union warns banks of court bat­tles in loom­ing lay­offs

Bifu sec­re­tary gen­eral Isa­iah Kubai says due process which in­cludes no­ti­fy­ing the union and the Labour min­istry of the de­ci­sion within the stip­u­lated time should be fol­lowed

The Star (Kenya) - - News - MERCY GAKII @TheS­tarKenya

Banks should fol­low due process in lay­ing off union­is­able work­ers or face court bat­tles, a trade union warned yes­ter­day. The in­dus­try is grap­pling with low mar­gin pres­sures due to in­ter­est con­trols which took ef­fect on Septem­ber 14.

There have been fears of job losses if lower cost of bor­row­ing does not re­sult in in­creased up­take of loans, as banks seek to cut costs amid dwin­dling profit mar­gins. Mid-tier lender Fam­ily Bank be­came the first to sig­nal a cut in its work­force with a vol­un­tary early re­tire­ment plan for work­ers this month.

“Em­ploy­ees who are el­i­gi­ble will have 14 days from the day of this memo to ap­ply. The of­fer shall close on 14 Oc­to­ber,” the lender said in a memo on Septem­ber 30. “At the close of the of­fer pe­riod, the bank will re­view ap­pli­ca­tions re­ceived and com­mu­ni­cate the fi­nal de­ci­sion. The bank re­serves the right to deny any ap­pli­ca­tion.”

The Bank­ing, In­sur­ance and Fi­nance Union of Kenya how­ever warned that banks should fol­low due process in ter­mi­nat­ing union­is­able work­ers. That, Bifu sec­re­tary gen­eral Isa­iah Kubai said, in­clude no­ti­fy­ing the union and the Min­istry of Labour of the de­ci­sion to send the staff home within the stip­u­lated time.

“If they don’t, we will seek to stop them in court,” he said on the phone.

The union said it is op­ti­mistic in­ter­est mar­gin pres­sures will be short term, and it ex­pects mas­sive loan vol­umes to make up for the pro­jected profit.

The bank­ing in­dus­try fired 2,036 staff, most in cler­i­cal and sec­re­tar­ial units, in 2015 as banks put in place au­to­mated sys­tems to en­hance op­er­a­tions, the Cen­tral Bank said in Bank­ing Su­per­vi­sion An­nual Re­port.

With in­ter­est on loans capped at 14 per cent with a floor of seven on in­ter­est paid on term de­posits, the in- dus­try has failed to rule out lay­offs as it strives to en­hance ef­fi­ciency in its op­er­a­tions.

“There is no ques­tion that ef­fi­ciency has to come into play...when you have such re­duced mar­gins. Hope­fully this (in­ter­est con­trols) will bring more cus­tomers to the banks – more cus­tomers who will be will­ing not just to bor­row but also to save,” NIC Bank man­ag­ing di­rec­tor John Ga­chora said on Septem­ber 14.

Fam­ily Bank yes­ter­day said the of­fer for early re­tire­ment should not be con­strued to mean there’s a loom­ing staff lay­off. “The VER pro­gramme is part of a wider trans­for­ma­tion pro­gramme,” it said.

/ FILE

Fam­ily Bank chair­man Wil­fred Ki­boro at a past event

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