Sacked Bank Workers Demand Entitlements

Having worked 11 years for one of the banks that recently sacked its staff , Michael Olajide was sacked from his darling job last week. He was among the hundreds of bankers who lost their job in the cost-cutting measure of retrenchment embarked upon by banks in the country . He is not bitter that he has lost the means of his livelihood but he is grieved that he was not paid his entitlement.

“I have been working for 11 years and when they wanted to lay us off, they told us that the bank has no money to pay salaries. They did not give us letter of termination and now we are at the mercy of the union” Olajide narrated.

Just like Olajide, Adebambo Olaklekan is also another one of the hundreds who have lost their jobs in the mass sack which cut across all the banks. To them, the first point of call in cost cutting measures is relieving staff of their duties, mostly without paying off entitlements.

The banking sector has not been having it good in recent times particularly with the crash in global oil prices that increased non performing loans, eating deep into their profits, a situation worsened by different policies by both government and regulators.

A look at the 2015 financial report of most banks show a decline in the profitability level of banks with only a few of them improving their profits over what they made the previous year. Most had recorded significant decline in profit after tax. For example, FBN Holdings which is the parent body First Bank Nigeria had recorded an 82 per cent drop in profit while the profit of Diamond Bank had declined in 2015 by 88 per cent to N5.6 billion.

Likewise First City Monument Bank recorded a 79 per cent in its profit for the year 2015 just as Ecobank’s profit dropped to N21.2 billion, a 68 per cent decline compared to what it made in 2014. Consequently, the banks, so as to make up for the decline in business had resorted to lay off of staff.

Within one week, three banks – Ecobank, Diamond and Skye Bank sacked over 1,250 staff citing economic downturn as reason for the cut. The recent sack has increased the number so far chopped off from the salary block in the industry since one year ago to about 10, 000.

Before Ecobank and Diamond bank which recently sacked 200, FCMB had laid off 700 workers earlier in the year while Fidelity Bank sacked 100 late last year. FBN Holdings, the parent company of First Bank of Nigeria Limited, recently said it would prune the number of its employees by 1,000. While Ecobank has allegedly closed down its 100 branches in Nigeria, some other banks are said to be planning to cut down the size of their workforce. FCMB has also started a shut down of some of its branches.

This development in the sector has continued to generate concerns in the country, spurring the Minister of Labour and Productivity, Chris Ngigie to direct banks to halt all retrenchment process. Operators in the financial sector as well as employers associations have however argued that it was not within the jurisdiction of government to determine the workforce of the banking industry.

They had maintained that government polices had been responsible for the present predicament of the Nigerian financial industry. Last year, the Federal Government had withdrawn over N2 trillion from the banking sector through the implementation of the Treasury Single Account (TSA). Cash Reserve Requirement, which is the statutory percentage of the deposits received by banks that is kept with the Central Bank of Nigeria was also increased from 15 per cent to 22 per cent.

Asides this, the gradual phasing out of commission on turnover had reached its final stage. The drop in global oil price had also played a major part in the declining fortunes of banks as many had burnt their fingers with a sharp rise in non performing loans which they had to make provisions for.

The foreign exchange crisis had also impacted the banks negatively and as they do not operate in isolation, banks had also been directly and indirectly been affected by rising inflation, lower power generation amongst other economic headwinds that had plagued the country.

According to Niyi Adeseun, an Executive Director at Heritage Bank, banks in the country are facing harsh times and are still expected to turn in profits. “As you cannot force profitability at a time such as this, the best anyone can do is to cut down costs in every way possible.”

Director General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, believes the move by banks to lay-off workers remained an entirely business decision. “These are private organizations and I don’t think it is right for government to compel them on matters like this. Government could prevail on them through moral suasion.

According to him, the best government can do under the present situation is to appeal to banks to be more humane in their management style and see whether the laying-off of workers could be moderated. To him, the government was being sentimental because banks were involved as he noted that a lot of businesses, especially those in the manufacturing sector have been laying-workers because they could not access critical inputs and other raw materials needed, which ultimately affects their profit margins.

Labour unions however hold a contrary view as they had threatened to close down the branch networks of any defaulting and insurance companies if they fail to comply with the directive of the Federal Government on the mass sack of workers.

President of the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), Danjuma Musa who said the governement’s directive shows “responsibility and sensitivity to workers” warned that “employers would violate this directive would have themselves to blame because the union is prepared to close down the branch networks of any defaulting banks and insurance companies without further notice.”

Stating that banks had long been engaging in anti-workers activities through different levels of exploitation in varying degrees, ranging from sacking for non performance, denial of right to collective bargaining amongst others, he said the bank’s with the exception of Ecobank had engaged with the union before disengaging some of their staff.

Musa who stressed the need for banks to follow due process before sacking any worker, noted that the continuing mass sack of workers in the financial institutions could not solve the problem facing the banks.

To drive home his point, the Minister of Labour in Switzerland also threatened that any bank that fails to comply with its directive will have its banking licence withdrawn, a position the LCCI DG disagreed with as he pointed out that only the Central Bank of Nigeria(CBN) has the power to withdraw the license of any bank found wanting or have committed an infraction.

Managing Director and Chief Executive of Cowry Assets Management Limited, Mr. Johnson Chukwu, also described the decision of government as ill-advised and unnecessary as such threat would erode customers and investors’ confidence in Nigerian banking system.

“I think that the government’s threat to withdraw the license of any bank that flouts its order not to retrench staff was ill-advised and unnecessary. In the first place if the government intention is to preserve jobs in the banking industry, a revocation of a bank’s license for retrenching some staff will mean that every other staff of the bank would now be dismissed by virtue of the closure of the bank.

“Secondly, threats of this nature create fears in the mind of investors particularly foreign investors as it gives the impression that government dictates for employers or that the labour market in NIgeria is highly regulated,” Chukwu warned.

For the workers who have been thrown into the job market, all they want is to be paid their full benefits so as to venture into business and be able to sustain their families in the trying times which Nigeria is being faced with.