A se­nior bank­ing of­fi­cial was so up­set by a change in his com­pany’s chain of com­mand that he re­signed and asked a court to award him dam­ages

Financial Mail - - IN GOOD FAITH - @carmel­rickard

Some­times even top man­agers get to ex­pe­ri­ence the pain and in­se­cu­rity that or­di­nary work­ers whose jobs are at risk know only too well. Take the case of Mu­sonda Mu­tale, Zam­bia’s coun­try head of cor­po­rate bank­ing at African Bank­ing Corp. Af­ter a shake-up in the bank he was so un­happy with his new po­si­tion that he went to court, claim­ing he was un­law­fully de­moted and con­struc­tively dis­missed fol­low­ing uni­lat­eral changes to his con­di­tions of ser­vice.

What made him most un­happy was that un­der the new ar­range­ments he no longer re­ported di­rectly to the MD and group head in Jo­han­nes­burg, as in the past.

That ad­just­ment to his line of re­port­ing dis­tressed him so much that he took the con­sid­er­able fi­nan­cial and pro­fes­sional risk of leaving his job and then ini­ti­at­ing a court chal­lenge.

The bank’s 2015 re­vamp was in­tended to en­sure that its struc­tures were sim­i­lar to those of large in­ter­na­tional banks and that it could han­dle cer­tain planned merg­ers. One re­sult of this re­struc­tur­ing was that a new po­si­tion was cre­ated just above Mu­tale’s, which al­tered the chain of com­mand so that he no longer re­ported to the MD as be­fore.

In his view, this amounted to a de­mo­tion and a uni­lat­eral change of con­tract for which, he said, the court should award him dam­ages. He also asked for dam­ages for “men­tal an­guish” and com­pen­sa­tion for loss of em­ploy­ment.

As far as the bank was con­cerned, how­ever, no de­mo­tion had taken place; he was not fired, but had vol­un­tar­ily re­signed.

A for­mer head of “hu­man cap­i­tal” of the bank gave ev­i­dence for Mu­tale, out­lin­ing the al­ter­ation of his po­si­tion in the new struc­ture in­clud­ing the fact that he was no longer part of the bank’s man­age­ment com­mit­tee. She said that af­ter the re­struc­ture, his ti­tle did not dif­fer, nor did his con­di­tions of ser­vice in terms of re­mu­ner­a­tion.

In his own ev­i­dence, Mu­tale said at the time he was em­ployed “it was agreed” that he would report to the MD and group head of cor­po­rate bank­ing. There was noth­ing in the con­tract to say that the bank would vary his re­port­ing lines, and so when this oc­curred he con­sid­ered it to be a uni­lat­eral and ma­te­rial breach of his con­tract. Dropped from the man­age­ment com­mit­tee, he no longer en­joyed the “over­all su­per­vi­sion and strate­gic di­rec­tion” of his depart­ment and, as he saw mat­ters, this amounted to a de­mo­tion.

He con­ceded, though, that his con­tract had not specif­i­cally stated that he would report to the MD and that his terms and con­di­tions of ser­vice re­mained the same af­ter re­struc­tur­ing. Mu­tale did not “specif­i­cally re­sign” from the bank, but “deemed the al­leged vari­a­tion of his em­ploy­ment as a ter­mi­na­tion [by the bank]”.

For the sake of a merger

The key ques­tion for the court in its mid-au­gust de­ci­sion was whether there had been con­struc­tive dismissal. Con­sid­er­ing that Mu­tale’s pack­age re­mained the same af­ter re­struc­tur­ing, the judge said he did not ac­cept that Mu­tale had been de­moted and he could also not find that Mu­tale had been con­struc­tively dis­missed.

The bank’s re­struc­tur­ing was in part to fa­cil­i­tate a sub­se­quent merger with Fi­nance Bank Zam­bia. Though Mu­tale could have stayed on af­ter the al­ter­ations with his fi­nan­cial pack­age un­changed, other mem­bers of staff were not so for­tu­nate: an es­ti­mated 200 staffers were let go af­ter last year’s merger, through a let­ter that read, in part: “Fol­low­ing the skills and com­pe­tency as­sess­ment, you have not been of­fered a role in the merged bank and have there­fore been de­clared re­dun­dant. Re­gret­tably, this means that your em­ploy­ment will ter­mi­nate. This de­ci­sion is not a re­flec­tion on your per­for­mance.”

Imag­ine the trauma that no­tice caused, and you can have lit­tle doubt that the re­trenched staffers would gladly have ac­cepted a mere vari­a­tion in re­port­ing line if it had meant keep­ing their jobs.

Mu­tale saw the move as de­mo­tion and a uni­lat­eral change of con­tract

123Rf/lu­cian Alexan­dru Mo­toc

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