Panic as retrenchment looms at ABSA Botswana

 

Panic and distress has hit most employees of Absa Bank Botswana Limited as the bank undertakes a rationalisation exercise which will see some employees, especially at managerial level, retrenched. Absa Bank Botswana is part of Absa Group Limited, an African financial services group. Absa Group Limited is listed on the JSE in South Africa and is one of Africa’s largest diversified financial services groups with a presence in 12 countries across the continent and around 42,000 employees.

In Botswana, it is a leading bank with 1,100 employees, 32 branches and 114 ATMs.

Botswana Guardian has established that some of the staff have been served with letters of notice for the re-organisation exercise, Section 25 Notice of the Employment Act by the Managing Director, Keabetswe Pheko-Moshagane. It is not clear as to how many employees will be affected as letters are still being issued to employees. There are however fears that it might be a sizable number which keeping employees on the edge as they do not know what the future holds for them.

According to Pheko-Moshagane, the bank is engaging in the process with the aim of building a future-fit workforce in line with the bank’s strategic intent. She said pursuant to the review, it has become evident that the composition of some roles falling within the corporate grades BA4 to Vice President (VP) “the management cadre” in certain business units are not optimal and do not enable the Bank to properly address its strategic and operational intent. Employees however have argued that while they acknowledge that a retrenchment can be necessary, their worry is how the process has no integrity or transparency.

“The MD says there is no criteria in place that determines how many will be retrenched amongst those who have received letters. A significant number of employees have not received the letters and this is worrisome as people do not know where they stand. In a transparent process, all employees would have received the letters of Section 25 of the Employment Act,” said a source at the Bank.

It has been argued that the said strategy to be aligned with, has not been shared with the employees. The re-orgainsation process is said not to be done in good faith.

Pheko-Mogashane in a notice dated November 9th 2023, revealed that the Bank intends to review job fit levels to determine the suitability of the current teams in relation to the revised roles and capabilities for the management cadre. “In instances where there are skills gaps and or misalignment, the Bank will consult with the employees, likely to be impacted for purposes of: seeking ways of averting or avoiding the need to terminate employment for operational reasons; if necessary, a fair selection criterion; and if possible, on ways of alleviating the hardships which may be caused by the termination of their employment,” said the bank’s MD.

Pheko-Mogashane told the employees that although a concerted effort will be made to avoid the need to separate with the affected employees, “regrettably, there are likely to be instances where terminations of contracts of employment for operational reasons cannot be avoided.”

The decision by the Bank has also drawn the attention of the Botswana Financial Institution and Allied Workers Union (BOFIAWU). The union’s chairperson, Mills Tlhoro said the union distances itself from the ‘unlawful’ conduct by the Bank and urged all its members to disregard any unlawful attempts by the Bank to terminate their employment under the guise of an unlawful and/or Unilateral Voluntary Separation Scheme.

In a notice to the union members, Tlhoro claimed that the union is being denied the right to properly exercise its statutory rights by the Bank, which is unlawful and constitutes bargaining in bad faith. “It has come to the attention of the union that the Bank has embarked on a voluntary Separation Scheme exercise that is patently targeting the union’s members with an intention to weaken the union in the bank,” said Tlhoro.

While Absa Botswana has announced a restructuring exercise, on the flipside, its latest financial results shows a bank in good financial health. For the six months period to June 2023, Absa posted a profit of P350.1 million, up 16 percent when compared to the year before. “This was due to a maintained positive momentum of material lines of our statement of comprehensive income. On aggregate, our total revenue grew by 17 percent on the comparative period, primarily out of the momentum in our net interest income together with rebound performance of our non-interest income lines, ” said the bank in a statement.