Tension has erupted at DFCU Boardroom as former Crane bank employees drags bank to court over wrongful dismissal. When DFCU Bank controversially bought off Crane bank in January 2017, it promised at least in the eyes of the public, that it would not lay off the extra employees it had acquired but instead accommodate them into its human resource files. This was welcomed by the public, government and employees themselves who apparently were assured of job security at that materal time.
But now the disturbing news that has left Ugandans and government in anguish is the news trending that former employees of Crane bank are to sue DFCU bank for laying them off and are demanding for over Shs 6 billion compensation for wrongful sacking. How could a bank that promised to keep employees it inherited now turn around to sack them at the time when unemployment levels are high in the country? Why did DFCU management deceive the public that it would not lay off the new employees it had acquired?
And how come that DFCU did not make a public announcement as regards the sacking of the employees it inherited? One of the financial analysts Daily Post team talked to said the employees job security at Crane bank was one of the key contentious issues that arose as Bank of Uganda was in negotiations to sell off Crane Bank to its rival DFCU Bank.
He went on to reveal that DFCU Bank sacked the employees because of its greed to earn too much profits within the shortest time possible. Part of the strategy was to sack most of the newly acquired employees so as to save on the monthly salaries and other costs such as allowances.
We shouldn’t forget that Crane Bank has sued Bank of Uganda which liquidated it. Remember that in August DFCU Bank announced a profit of Shs114 billion, a huge chunk of it accruing from the acquisition of Crane Bank assets. It is interesting to see employees going to court to have DFCU Bank compensate them. DFCU Bank has no support here. It lied to the former Crane Bank employees and the public. “DFCU has lost trust in sections of the public,” a former HR manager at Crane Bank said. “They told us we would stay but now we’re on the harsh streets hunting for jobs which are not there,” he added.
One of Crane bank branches taken over by DFCU
That the deputy registrar in-charge of civil matters Sarah Langa gave the authority to ten ex-crane Bank employees to file a representative suit on behalf of the other 400 terminated employees speaks volumes. Indeed, the employees have a point. To a great extent they worked and contributed to the profits that DFCU earned even as they were terminated within one month after the takeover.
That employees want over shs.6 billion from DFCU for the mental anguish as well as damage to their reputation and finances as a result of this wrongful termination is not surprising.
The new development, according to a Professor of Economics at Makerere University puts Bank of Uganda again under spotlight. How could Bank of Uganda just sell Crane Bank without ensuring the job security of those who were depending on the commercial bank to earn a living? “It was an oversight and Bank of Uganda should take some responsibility,” he said, adding that there should be a change in policy that when a bank buys its rival, it has to take the interests of employees serious, including compensating them handsomely,” the analyst who deals in capital markets added.
One of the sources we talked to has suggested that the sacked employees should as well sue Bank of Uganda for selling Crane Bank to DFCU in disregard of employee concerns. “BOU should have taken precaution on this matter,” he said.
The deputy registrar in charge of civil matters Sarah Langa on Monday, allowed the application of 10 ex-Crane Bank employees to file a representative suit on behalf of more than 400 terminated colleagues with similar interests.
The former employees some of whom turned up to court yesterday with their children say life has been tough since they were dismissed from their source of livelihood following DFCU’s take-over of Crane Bank. Some claim they have failed to pay school fees for their children as well as meeting other basic needs such as food and health care for their families.
An analyst who said the employees have asked for too little adds that DFCU Bank has no option but to come out and apologize to the public for the deceit it made that it would not sack Crane Bank employees. “How do you trust a bank that says one thing today and tomorrow it does the opposite,” an analyst said, adding that this has tarnished the image of DFCU Bank in the eyes of the Ugandan public.