FIRST Capital Bank (FCB) is set to retrench workers as the business restructures in the face of the hyperinflationary environment and the need to digitalise.
In a letter dated November 12, FCB managing director Ciaran McSharry said the current hyper-inflationary environment, the changing customer transaction habits together with the migration of its information technology systems as well as strategic focus on efficiency had necessitated the changes.
He added that the changes would enable a broader change to the bank’s operating model.
These changes, he said, were designed to align it with group countries and leverage on the Mauritius centralised services that support all five countries within the FCB group.
“Inevitably such changes impact ways of working and business structures. As a result of this I need to advise that we will be restructuring the business, which will take the form of a compulsory restructuring exercise with some colleagues having to exit the bank,” McSharry said.
“This is never an easy exercise, and certainly not a decision that is taken lightly. We have already met with representatives of both managerial and non-managerial colleagues in the bank as part of the engagement process. This will be followed through to the next steps over the coming few days and regular updates will be provided.”
In response, the FCB workers’ committee said the decision to retrench workers was “immensely premature”.
“We note with concern that, on November 12, 2020, the employer sent out a letter indicating the need to restructure the business and its intention to do this by immediately engaging in compulsory retrenchments,” the workers’ committee said.
It said the business’ decision to do this comes barely a year after the 2019 retrenchments which are still subject to judicial intervention.
The decision, the workers’ committee said, had prematurely side-stepped the provisions as stated in the Labour Act which obliges the bank to keep workers informed of developments that may lead to retrenchment.
“In this case, as previously mentioned, the employer literally sprung the retrenchment decision on the employees without having kept the latter abreast on the developments that led to same,” the workers charged.
“The manner in which the employer conducted itself in failing to comply with section 12D(1) of the Act, sends shock waves to the affected employees especially during these times of the coronavirus pandemic. In view of the above, it is submitted that the intended retrenchment is immensely premature.”
The workers argued that there were no measures taken by the employer to avoid retrenchment.
“The employer also did not provide information related the previous cost structure vis a vis the current cost structure to show that the measure that it has taken to retrench is the best possible means to carry out its restructuring exercise,” the workers pointed out.
“This moreso, as there are available measures that can and should be taken by the employer to achieve the same intended goal. Some of which include, but are not limited to, terminating the current fixed term contracts or calling for voluntary retrenchment as opposed to compulsory retrenchment.”
The workers noted that, while employers are entitled to make business decisions that best suit the business, the welfare of the employees, the principles of social justice and equity must not be removed from the equation.
“The harsh economic climate also makes it impossible for any of the proposed retrenches to sustain themselves after receiving the package. Recent events in the country’s economy have shown that an employee’s monthly wage no longer meets his basic needs as the prices of basic goods have risen by over 400%. The resultant effect is that the proposed retrenches will become destitute soon after receiving the said package,” the workers said.
They recommended that in the circumstances, the intended retrenchment be suspended pending the joint exploration of alternatives to avoid retrenchment.