Bank strike will hurt the economy, Banking Association warns

As South Africa this morning awaits the Labour Court ruling on the planned protest by the Congress of South African Trade Unions-affiliated South African Society of Bank Officials (Sasbo) in the banking industry, the Banking Association of South Africa (Basa) has warned that the labour action would further hurt the country’s struggling economy.

Should Sasbo’s legal argument be found compelling, the shutdown could see between 40,000 to 70,000 finance sector employees staying away from work, in a campaign against planned job cuts in the banking sector.

The move has led to Business Unity South Africa (Busa) launching an urgent court challenge against Sasbo, due to the impact the strike would have on the economy.

Basa managing director Cas Coovadia yesterday said banks recognised the rights of workers to engage in protest action, but the planned stayaway would “further burden the economy and deter investment”.

“The only sustainable solution lies in improved education and attracting higher levels of investment to drive economic growth and job creation.

“These require government, labour and business to work together in the national interest,” Coovadia said.

Protest actions needed to be undertaken in terms of the law, to ensure the safety of the public, businesses, customers, “as well as the least possible disruption to the economy”.

The global banking industry was “evolving in response to economic pressures, digital innovation and the changing way customers use and consume financial services”.

“The reduction of staff numbers in many traditional banking services is a worldwide phenomenon,” said Coovadia.

“Because of global changes, many in the local banking industry are having to restructure their businesses to ensure they remain sustainable and relevant to the needs of consumers.

“South African banks also have to manage the impact of low business volumes because of the state of the economy, which will remain weak for the foreseeable future.”

The South African Reserve Bank has predicted growth of only 0.6% for this year and under 2% through to 2021.

SA banks were “painfully aware of the high rate of unemployment in the country”.

“There have been negotiations with staff and their representatives in good faith, to minimise job losses,” said Coovadia.

“Where necessary and possible, they manage their staff numbers through natural attrition and by providing training and new opportunities to affected employees.

“Retrenchment is a last resort.

“Basa members who are restructuring their businesses have indicated that a few hundred employees are at risk of retrenchment, despite the efforts of redeployment and reskilling.

“Between them, South Africa’s six largest banks had 152,441 employees in 2018. This is an increase of more than 4,000 from 148,500 in 2015.

“Given the strong growth in smaller banks and financial technology companies, the financial system remains a growing employer.”

While Sasbo expected most banks to operate as usual tomorrow, it said its members were “taking the necessary precautions to minimise disruption and inconvenience to customers”.

Coovadia advised bank customers – in cases of unavoidable disruptions at branches – to make use of digital banking services.

Banks would be “carefully monitoring the situation to ensure the safety of their customers and staff”.

– brians@citizen.co.za

For more news your way, download The Citizen’s app for iOS and Android.