The Federal Government has waded into recent developments in the banking industry with a directive that banks stop the ongoing mass retrenchment until agreements are reached between all stakeholders. It also stated that it would review the disengagement of thousands in the sector to ensure that due process was followed. According to the Federal Government, any process discovered to have contravened regulations would be nullified. This is the outcome of a meeting held in Abuja yesterday with representatives of the goverment, the management of banks and organized labour. Minister of Labour and Productivity, Prince Kayode Adetokunbo, who presided over the meeting, said the goverment and its agencies would not sanction any action that would cause joblessness. He insisted that due process must be followed at every step if disengagement of workers is inevitable. The meeting also revealed that the management of Oceanic Bank Plc consulted the various unions before sacking 1,900 of its staff. Failure to comply with the new directive, the goverment stated, would translate to contravention of labour laws and flouting of due process. Adetokunbo called on the management of banks to ensure that dialogue with the unions continue in order to thoroughly address issues at stake. “We must keep people at work and if there is any adjustment in the banking sector as a result of present global financial crisis, it must be done in accordance with the labour laws, if not it is not acceptable,” he declared. “Any sacking or retrenchment that is not done in accordance with the Labour Act and the collective agreement signed will be nullified and not be accepted; let us be clear about that. “After all, you cannot impose a willing servant upon a willing master, that is the law of labour. You must sit down with them and discuss where this has not taken place,” he said The minister admitted that pay cut across the board could not be avoided in banks, a fact that was also acknowledged by labour. However, due process must be followed in the attempt at reducing operational costs, he argued. Adetokunbo disclosed that the goverment would set up a committee where issues concerning banks and financial institutions could be resolved as obtainable in the oil and gas sector which has the Presidential Technical Committee on Oil & Gas. He reiterated that the management of banks absent at the meeting, especially Union Bank, must meet with the goverment and labour leaders at a similar forum to present their case. He urged the unions to stop issuing ultimatums to banks, but instead embrace the spirit of engagement and negotiation. Deputy Governor of the Central Bank of Nigeria (CBN), Alhaji Suleiman Barau, justified the mass retrenchment, saying that although it was unfortunate, it is necessary for the survival of the banks. He added that the CBN could not dictate to the banks on how to carry out their business. Barau dispelled allegations that the directive to lay off workers emanated from the CBN. According to him, the apex bank only advised them to seek various ways to cut cost as shareholders fund of the banks were already in the negative. He added that it would have been criminal for the banks to pay staff salary with depositors’ funds. “We never instructed the banks to lay off staff, when we injected money into the banks. What we did was to advise them to stabilize and meet the requirements expected of them. “It will interest us if the banks did not follow due process. But the situation we are witnessing in the banks is unfortunate. But if they are to retrench and remain stable, it is quite unfortunate; we only advised banks to focus on cash base because rightsizing is not on only staff but on the cost,” stated Barau. He added that the N620 billion bailout funds which were given to banks was for stabilization and meeting the demands of depositors and not for overhead cost. “Typically, they had to take drastic measures; all of them are now focusing on recovery of bad debts and rightsizing on not just staff, but operations which was taking over 50 per cent of their expenditure. It is not the business of CBN to tell banks what to do since they are in the business to make money,” he explained. Source: Thisdayonline.com