Retrenched employees of Indebank Limited, now absorbed by National Bank of Malawi (NBM), have accused their former employer of flouting retrenchment procedures and making erroneous calculations of their take-home packages.
Indebank declared redundant from employment about 114 staff out of 254 on June 29 2016 following the completion of its takeover by NBM, the new majority shareholder.
In their three-paged letter dated July 4 2016 which The Nation has seen, the retrenched employees said they feel unfairly treated and that they deserve compensation from the financial institution.
Among others, the ex-workers are challenging the bank on the retrenchment procedure applied, severance pay calculation, notice pay, loans and employee share ownership scheme (Esos) shares payment and leave days.
On the retrenchment procedure, they argue that the criteria used by the bank in determining staff to be retrenched or maintained lacked transparency.
Reads the letter in part: “We have observed, without prejudice, that some of the people you have taken on board have no experience or background for the jobs you have given them and you have left out those who have the requisite experience and skills.
“Lack of clarity on this criteria leaves us feeling unfairly treated. We deserve to be compensated for being unfairly selected for redundancy.”
Further, the aggrieved people are demanding compensation for being robbed of their legal right to fair treatment under principles of natural justice after the bank denied them an opportunity to be heard in the retrenchment process.
They are also challenging their former employer for allegedly applying erroneous computation on their severance allowance ‘wages’ which they claim did not include basic pay, house allowance, car allowance (for those entitled) and company car (for those entitled).
The ex-members of staff have since given 48 hours (from July 4) to the bank, which already announced closure of 14 of its branches nationwide, to respond in writing to their grievances.
Yesterday, Indebank chief executive officer William Chatsala, the addressee of the letter, said following the integration of his bank and NBM, all business was transferred to the latter as such he was not mandated to speak on anything.
Head of integration at NBM, Masauko Katsala, also refused to comment and further referred The Nation to NBM corporate affairs manager Anne Magola.
However, Magola declined to comment saying: “I cannot comment on that one because it is written to Indebank.”
But commenting on the retrenched employees’ grievances, a human resource management specialist said the people could have a strong case if NBM did not follow some sections of the Employment (Amendment) Act regarding payment of severance allowance.
He said: “Under the amended Employment Act, severance allowance should include basic salary and any money or subsidy paid to an employee as an allowance. This can be housing allowance, accommodation allowance, car allowance, telephone allowance or even transport allowance.”
NBM became the principal shareholder in Indebank after attaining 67.05 percent shares which was owned by government and also another 30 percent from Press Trust bringing its total interest in the bank to 97.05 percent.
In another merger involving the previously government-owned Malawi Savings Bank (MSB) and FDH saw about 250 people also losing their jobs.
In other sectors, the week also saw Malawi Mangoes (MM), the country’s first large-scale commercial fruit farming and processing enterprise based in Salima firing 192 of its employees because of what the company claims tough operating environment.