Retrenched OBM staff want K880m
Forty-four retrenched employees of Opportunity Bank Malawi (OBM) have filed an K880 million compensation claim for alleged unfair dismissal and other benefits.
OBM has closed some of its branches in the country as part of its restructuring process to address financial losses and turnaround the institution. Since 2011, the bank has made losses estimated at K7 billion.
The restructuring of the bank has seen a shift from over dependency on human resource to increased reliance on technology and use of alternative delivery channels to service its clients, a development that has cost some employees their jobs.
The loss of jobs has not gone down well with the affected employees such that 44, who were based at Nkhata Bay, Nkhotakota, Chitipa, Mzimba and Jenda branches, are seeking K20 million compensation each. They argue that the bank dismissed them without being heard.
They also claim the bank used force to kick them out of offices on June 13 2016.
Mzuzu-based private practice lawyer George Kadzipatike, representing the 44, filed a demand letter dated June 30 addressed to OBM chief executive officer, arguing that the 44 were unfairly dismissed.
The lawyer also said the bank treated some of them harshly in recovering loans as their accounts were debited at once.
To compensate for the alleged dismissal, Kadzipatike said each employee should be awarded K20 million within seven days or risk court action.
Reacting to the compensation claims, OBM deputy chief executive officer Bernard Mkandawire on Tuesday said the affected staff are free to make claims, but contended that the bank followed proper procedures in retrenching the employees and it is not moved by the claims and threats for court action.
He said the bank consulted widely, including staff, on strategies to avoid losses and protect depositors’ money as required by the Reserve Bank of Malawi (RBM). He said OBM is the only bank that has made huge losses and could not afford to continue making such.
Said Mkandawire: “It is very clear that this bank has been making losses, from 2011 to December last year the bank made a loss of K6billion. We have already published financial statements indicating the K6billion loss. Just last year alone it made a loss of K2.8 billion which we published last week. And just from January [2016] to date we have made a loss of K1billion. So what you see in the mid-year result of the bank is a loss of K1 billion.”
He also said the bank recovered the loans to protect depositors money, adding that some of the affected employees were given chance to come up with settlement plan.
Mkandawire disputed accusation of use of force saying police officers were deployed to protect the banks’ property. He said the bank has been experiencing robberies that have cost it millions of kwacha.
The OBM case comes barely days after retrenched employees of Indebank Limited, now integrated in National Bank of Malawi (NBM), queried the calculation of their terminal benefits. n
