Gale of sack in banks: Govt directive the panacea?
The Bankers’ Committee of the Central Bank of Nigeria (CBN) recently gave assurance that the rate of mass sacking in banks would be reduced within the shortest time possible. NIYI OLAOYE writes on the possibilities of actualizing these promises.
Recently, there have been series of staff laying off in the nation’s banking industry with Ecobank Nigeria sacking over 1,040 of its employees. Diamond Bank Plc and Skye Bank also retrenched 200 and 175 members of their workforce respectively.
In the same vein, FBN Holdings, the parent company of First Bank of Nigeria Limited, recently said it would prune the number of its employees by 1,000 and many more happening with Zenith Bank Plc and Sterling Bank Plc and others .
Following the gale of job losses, the Federal Government through the Minister of Labour and Productivity, Dr. Chris Ngige, directed the banks to stop the retrenchment exercise.
The minister further directed that all the retrenchments done in the past four months should be put on hold pending the outcome of a proposed stakeholders’ summit for employers and employees of the banking, insurance and financial institutions scheduled for the first week of July.
But responding to a question on what the banking sector was doing to address the issue in view of the threat by the Federal Government to withdraw the licences of errant banks, Managing Director, Standard Chartered Bank, Mrs Bola Adesola said that mass sacking of workers was not limited to the banking sector. In fact, he said the mass sacking in the sector was discussed at the at end of its 327th Bankers’ Committee meeting.
She said that while the banks understood the economic situation in the country, there would always be reasons for workers to be relieved of their jobs.
“On the recent news item on retrenchment, we also discussed it and obviously banks understand the implications of people not being in employment. We know what the situation is like in the country.
“Thus we are looking at ways of ensuring that we minimise many exit from our institutions. There will always be exit as you know because there is fraud and so on and so forth.
“So we have noted the market sentiments and I am sure that going forward it will be different,” she said.
But meanwhile, the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), had on same day CBN had their meeting said that they would start to picket banks that indulge in further mass sack of their employee. They added that the Federal Government was right to have warned the erring banks with withdrawal of their licenses if they refused to halt the gale of mass retrenchment of workers.
The two Labour groups stated that just like the bank disobeyed the laws of this country, when it comes to retrenching their (unions) members, “we will picket them to show them that they do not have monopoly of law of disobedience.”
Both the NLC President, Ayuba Wabba and the TUC President, Bobboi Kaigama, who frowned at the refusal of the banks to allow their workers to unionize, said the pronouncement of the Minister of Labour and Employment, Senator Chris Ngige was expected.
“If it however after correcting themselves desires to insist on sacking the affected workers, it must comply with the laid down procedure for embarking on such unfortunate exercise. Congress will be forced to take all necessary steps to assist the banks see the need to comply with the laws of Nigerian if after 21 days of this release the illegally sacked workers are not recalled by the affected banks. We advise all affiliates and state councils to start immediate mobilization against these banks as we work with other segments of the society to compel them to work within the ambits of our laws and the traditions and ethos governing Industrial Relations Practice in Nigeria.”
Experts’ position
A senior banking executive, who spoke to our reporter under the condition of anonymity said that the Federal Government was playing needless politics with the issue of mass sack in the banking sector.
In the first quarter of 2015, Diamond Bank sacked over 1,000 workers in what it dubbed as a realignment of its operations for a tougher 2015.
The bank’s profit before tax, for the year ended December 2015, dropped to N7.1billion from N28.10 billion in 2014. Its profit after tax stood at N5.66 billion, down from N25.49 billion it achieved in 2014.
The bank, in a statement said: “In the bank’s last appraisal, only 200 staff whose performance scorecards were adjudged to be lower than the minimum required to drive its strategic growth plan for the business year were relieved…With its trim-and-fit workforce, the bank is sure to meet its target for the current business year.”
The explanation offered by the Diamond Bank, of course, was not different from those given by Charles Kie, the managing director of the Ecobank, who said in a statement that the bank has realigned certain roles to ensure improved efficiency. The development, however, he said, has necessitated the exit of some staffers.
Ecobank Transnational Incorporated (ETI) recorded a dip of 68 per cent in profit after tax (PAT) for the year ended December 31, 2015. The audited results of the bank showed that profit before tax (PBT) declined from N86.4 billion in 2014 to N40.6 billion in 2015. PAT dipped from N65.7 billion to N21.25 billion.
About two months ago, First Bank of Nigeria also pruned down its workforce, saying that the job cut was necessitated by the “very bad” 2015 earnings, which saw the bank’s profit slump.
Speaking to Bloomberg in Lagos, Adesola Adeduntan, the Chief Executive Officer of First Bank of Nigeria, said: “We do not shy away from taking difficult decisions. We used to have above 8,000 people.
DMBs frown at FG
A senior bank official told our correspondent that the mass sack is a natural reaction to the economic situation of the country. He faulted government for attempting to stop the ongoing sack. “Government has no right to have issued such a directive that is capable of pitching labour against management of the banks,” the senior bank official said.
“When other businesses in the economy were shutting, did the government stop them? Is the government saying that people should continue to retain expense that is injurious to their existence? The banks are not extension of government MDAs.”
Another source, working with a new generation bank also preferring anonymity, said: “The government introduced the Treasury Single Account (TSA), which mopped cash out of the banks, investors took out over N1 trillion from the capital market, foreign direct investments are virtually not there, capital inflow has slowed, crude price crashed, inflation rate has jumped and growth rate has declined, all these factors contributed to starve the sector of funds.”
Similarly, the Director-General of Nigeria Employers’ Consultative Association (NECA), Mr Olusegun Oshinowo, said that the labour law does not empower the minister to issue such a directive, which he considers uninformed and “populist”.
He said that the labour laws had envisaged redundancy situation and, therefore, made provisions in section 20 of the Labour Act to guide the actions of the parties in the event of retrenchment or redundancy.
The Director-General of Lagos Chamber of Commerce and Industry, Mr Muda Yussauf, agreed that the sack is a business decision of owners, but said such decision must not be too profit-driven, without an element of humanism.
The President of Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI),Comrade Olusoji Salako, however, has aligned his position with that of the Federal Government to arrest the disturbing mass sack in banks and financial institutions in the country.
The General-Secretary of National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), Comrade Mohammed Ishaqu Sheikh, said that it was legally and morally wrong for banks and financial institutions to embark on sacking spree without consulting unions in the industry.
According to him, the recent sack violates extant labour laws and laid down procedures of sacking workers in the country. He said that his union would partner civil society groups to picket the banks that sacked workers without consulting the union. Sheikh advised banks to be creative and proactive in the face of changing economic situation.
A stakeholders’ summit for banking, insurance and financial institutions’ employers and employees is slated for first week of next month, but the question on lips of most concerned Nigerians is whether or not the confab would be in position to stop the spate of mass sack in the banking industry.
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