More than 70 former employees of Absa Bank have failed in their bid to revisit their voluntary exit seven years ago, after a judge ruled that the plan was fair and lawful.
Employment and Labour Relations Court Judge James Rika ruled that the lender acted in accordance with the voluntary exit scheme (VES) agreement, and the former workers failed to show any constitutional violations in the exit plan.
“There is no foundation for recall and renegotiation of VES. The claimants did not offer to refund what they received in VES packages, to lay a foundation for recall and renegotiations of VES. They cannot have their cake and eat it,” Justice Rika ruled.
The 79 former employees submitted that they received a bad bargain from Absa, formerly Barclays Bank, as they were allegedly coerced, and misled by the lender to accept VES.
The former workers added that the exercise was malicious and riddled with material non-disclosure and the exit packages were not enough to off-set against existing loans.
It was their claim that the severance pay at 15 days for each year of service was applied at a maximum of 24 years, yet some had worked for between 26 and 38 years.
Most of them said they were forced to amalgamate their loans, attracting additional costs and charges and the notices were short and unreasonable.
The former employees wanted the court to compel the lender to re-compute the benefits payable for every year worked, in line with Section 40 of the Employment Act, and at 30 days’ salary for every year worked for those who were union members.
They also wanted the VES 2017 and 2018 recalled, reopened and renegotiated within the appropriate environment with the assistance of the Labour Office, within the Employment Act and the due process dictates, with full and fair consultation and their participation.
The bank said it advertised VES in June 2017 and January 2018, as an offer to all employees, for voluntary exit.
The court heard that the terms of exit pay loan interest rates and conversion of unsecured loan facilities to secured loan facilities, were clearly communicated to those who chose to exit.
The workers were then given 14 days to consider the offer and decide whether to apply, based on the proposed terms.
The bank said the complainants voluntarily applied and even those who initially applied unsuccessfully in 2017, reapplied in 2018 and they all entered into binding agreements with the bank, to exit employment under VES.
Absa said although not mandated to do so, it consulted Banking Insurance and Finance Union (BIFU), and the process was conducted through the Joint Working Council (JWC).
The terms of the loan repayments were made clear in the offers, and through the mode of ‘frequently asked questions,’ involving the workers, said the bank and that it was open to them to decline the exit offer and continue working.
The bank denied claims of coercion, or misrepresentation as everything was voluntary.
The Judge agreed with the lender saying there is no evidence that they received a bad bargain as they were well-compensated, in accordance with the agreed VES terms.
Justice Rika added that if there was a bad bargain, it is not for the court to enable the former workers to escape a bad bargain.
“In accepting these special initiatives, Employees relinquish any claims to other benefits payable under their existing individual contracts, collective agreements, and any other provisions of the applicable employment law,” said the judge.
Justice Rika said not every business restructuring involves redundancy as a business can restructure for various reasons.
“It can right-size its labour force, without declaring redundancies, by adopting other restructuring tools, such as VES and VERS. The Employment Act recognizes termination for operational reasons, which is not synonymous with termination on account of redundancy,” said the judge.
