Business Times reports that with the merger between Ubank and African Bank now before the competition authorities for approval, Ubank employees have raised concerns about the possibility of job cuts.
Two months ago African Bank was named the successful bidder to acquire most of Ubank’s assets and liabilities and take on its employees as a going concern after Ubank was placed into curatorship in May. Ubank has its roots in servicing customers in mining towns and was previously known as Teba Bank. The Reserve Bank placed Ubank in curatorship amid concerns over corporate governance, weak internal controls and non-compliance with minimum capital requirements. Staff are now worried that African Bank has plans to cut jobs. A Ubank insider claimed last week that African Bank had reneged on a commitment to take on all Ubank employees under section 197 of the Labour Relations Act (LRA), which states that the new employer should maintain employees on the same terms and conditions as the previous employer. The jobs of the transferred employees must be protected for a minimum of 12 months. The Ubank source said African Bank wanted to amend the contracts of senior employees for six months, which would be in violation of the LRA. African Bank's Sibongiseni Ngundze declined on Friday to comment on concerns about job cuts for the 500 Ubank staff. Ngundze said African Bank had acquired Ubank under section 197 of the LRA, meaning the bank was buying its assets and liabilities and taking on its employees. Teba Trust Fund chair and former NUM president Joseph Montisetse said the trust was engaging with the curator on the merger.
- Read the full original of the report in the above regard by Dineo Faku at Business Times (subscriber access only)
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