The African Bank announced today that it has decided to discontinue the Section 189A consultation process because of the response it has received to its offer of voluntary severance and retirement packages, which are enough to stave off planned retrenchments.
The bank said it had reached the agreement with the South African Society of Bank Officials (Sasbo), the union that is representing workers who were to be retrenched. The mediation consultation entailed offering voluntary severance and retirement packages to staff.
In a bid to cut costs the African Bank in May issued notices to its staff about its restructuring plan that would have seen as many as 652 employees retrenched – about a sixth of the staff complement of 4 075.
However, today African Bank chief executive, Brian Riley, said as a result of the high number of workers accepting voluntary severance and retirement package, the bank no longer needed to continue with the retrenchment phase.
“The necessary reduction in staff numbers to achieve the appropriate cost base will be concluded through a voluntary process,” Riley said.
“Given this, we are pleased that we are able to avoid retrenchments. This outcome enables us to continue building a sustainable business over the long term.”
Riley said the bank was still in the process of evaluating some of the applications for the voluntary severance and retirement packages.
“We are already confident, however, that we have sufficient applications for the voluntary severance and retirement offer in the affected areas that the cost savings and other objectives of the bank have been met without the need to progress a section 189A retrenchment process,” Riley said.
“Once the evaluation and acceptance of the applications have been finalised, the company will communicate to the market the financial and other impacts of the entire process. We anticipate that this communication will occur shortly after 7 August.”