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African Bank looks to fire 652 staff

May 21 2017 06:01
Justin Brown

Johannesburg - African Bank this week issued notices to its staff related to a restructuring plan that will see as many as 652 staff members retrenched, a source told City Press.

“About 650 employees at African Bank will be retrenched. This is after the bank was rescued by government from liquidation,” the source added.

The retrenchment of 652 staff would see about a sixth of bank’s staff complement of 4 075 shed amid a high unemployment rate and a stagnant economy.

“The matter is now with the Commission for Conciliation, Mediation and Arbitration (CCMA). I found the news very disturbing because African Bank was rescued so that the employees’ jobs could be saved,” the source said.

Myan Soobramoney, the national secretary for banking trade union Sasbo, confirmed that the union had received a restructuring notice in terms of the Labour Relations Act from African Bank, in which it indicated that 652 people could lose their jobs.

Sasbo is affiliated to Cosatu.

Soobramoney said that Sasbo had responded and the matter had been referred to the CCMA for facilitation.

He said that African Bank looked like it would institute forced retrenchments, and Sasbo was fundamentally opposed to this and would not agree to them.

African Bank CEO Brian Riley in an email on Tuesday communicated with the bank’s staff regarding the restructuring. City Press has a copy of the email.

In response to questions on Friday, Riley said: “The bank is set to begin consultations with Sasbo, facilitated by the CCMA. An application has consequently been lodged with the CCMA for a facilitation process.

“The first consultation date of May 30 has been confirmed by all parties. Following the conclusion of this initial consultation process, which may take days or weeks, African Bank will be in a position to release further information.”

African Bank Investments Limited, the holding company of African Bank, was placed under curatorship by the SA Reserve Bank in August 2014 as the unsecured lender folded under the weight of spiralling losses.

In March last year, just before African Bank was relaunched, Riley said the bank would like to continue to cut costs, and that it may reduce its employee numbers via natural attrition.

In April last year, African Bank was relaunched with the South African Reserve Bank, the Public Investment Corporation and a consortium of six local banks as its new shareholders.

Before government rescued African Bank, it employed more than 5 500 people.

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cosatu  |  african bank  |  ccma  |  job cuts  |  financial services  |  banks
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