By Catherine Sasman WINDHOEK Former Agribank employees claim that last year's voluntary retrenchments were nothing other than unfair dismissals. Many are now preparing for a court battle with their former employer to prove their point. Alex Kamaundju and other former workers, who prefer anonymity, said the bank acted in bad faith when the board of directors declared 118 positions redundant. "The Agribank Act of 2002, which allows for expansion and growth with a strategy developed to increase the business of the bank into broader markets and growing the loan book by at least 10 percent per annum, was totally distorted by a few individuals who jumped on the bandwagon and saw an opportunity for self-enrichment and self-interest," Kamaundju claimed. The retrenchment, said the bank, was part of an envisioned restructuring of its human, financial, operational and supporting resources after years of loss-making. In May last year, the bank announced that it had decided to appoint an independent consultant, Consulting Synergies Africa, to conduct a functional analysis. The analysis, among others, found that the executive and management levels were "excessive and top heavy", that the number of employees who performed non-core business functions was also excessive with a concomitant unnecessary financial burden to the bank, and that reporting lines were too long, resulting in red tape. Furthermore, the salary packages of staff were found to be 40 percent higher than the market. The bank's board of directors as a result resolved that all positions be declared redundant, with all workers "encouraged" to either consider early retirement, or voluntary retrenchment or involuntary retrenchment. "The question remains, what happened between projecting a growth in the loan book to the point of declaring losses and making all jobs redundant?" the former workers asked. "Who was responsible for taking decisions which compromised and prevented positive growth? And why did staff have to bear the brunt of ineffective leadership, or at times, inconsistent leadership in between a sudden change of board of directors, a lengthy period of having no CEO, then a few acting CEOs, and then finally a new CEO in the last three years? "No doubt, the reputation of the bank suffered as it stands to reason that investors will be extremely cautious if a lack of good corporate governance rears its ugly head," the disgruntled former employees said. They went on to say that during this uncertain period, the old staff kept the "boat afloat" only to be declared redundant two years after the appointment of the new CEO, Leonard Iipumbu, who took over the reins in June 2005. The retrenched workers claimed that although a new structure with reduced salary scales was approved by the board of directors, "word has it that because it has proved difficult to attract staff from the market", the bank has been forced to offer higher salaries with benefits "in excess of the originally approved salary structure when it was made clear to all previous staff that they would have to take a salary cut". "So much for trying to retain staff costs," the former workers sneered. They further said the "excuses" being made of high staff costs should be challenged against decisions taken at a high level which accounted for the bank's escalating arrears. These decisions, they said, included the lack of capacity to negotiate and initiate affordable capital and the inability to introduce new and innovative products. "The strategy developed in 2004 allowed for expansion of the business of the bank, not a reduction. To try to save costs by retrenching staff was a futile exercise, not only costing the taxpayer in excess of N$25 million, but enriched the minority of younger individuals receiving the benefits of 20 years when in some cases being employed for five years and less. Even staff being in the bank for less than one year received the benefits of an additional 19 years!" they criticised. Moreover, they said, older staff, most of whom have served the bank in excess of 10 years and who have much less productive work life left, have lost an accumulative pension, with no early retirement benefits considered or consulted between the financial sector union, Nafinu, or the individuals themselves. "This is clearly an unfair and unequal process, benefiting a few at the expense of the accumulated years of service of others. How can this be construed as a fair process?" Kamaundju asked. According to the Bank, employees were served with a 30-day notice to exercise their options. The Bank stated that workers were then given the opportunity to negotiate the circumstances and conditions of the termination of their employment. "When we were declared redundant, there was only one legally employed person at the bank, and that was CEO Leonard Iipumbu," said Kamaundju. Only two managers, they said, remained employed at the bank. One is Reagan Mwazi, now the corporate communications manager, and the other is Masilo Hochobeb. Mwazi and Hochobeb, the former employees said, had also been charged by CEO Iipumbu to head the Simunye Project, which was to align the restructuring process. "It was a complete fiasco," said one former employee. "It became a personal vendetta, with Mwazi and Hochobeb serving their own personal interests." According to the former employees, all six managerial positions that became redundant - positions that do not exist in the bank's new structure - have served the bank for more than 10 years, four of whom were women. Three of these women are over 50 and are still unemployed. The younger woman, under 45, has since found employment. They further said none of the redundant positions apparently met the threshold requirements and a list of 46 staff members was identified for retrenchment. "Most branch managers, except one branch manager up north who still remains in the service of the bank, apparently did not meet the threshold requirements. Kamaundju and the other former employees also said that once the restructuring process was put in motion, a situation of "divide and manipulation" was the order of the day. CEO Iipumbu and Communications Manager Mwazi both declined to comment on these allegations.
2008-03-25 00:00:00 10 years ago