14 July 2018

Ethiopia: Commercial Bank Mang't, Labour Union Dispute Heats Up

The labour union of Commercial Bank raise concerns over the restructuring

The Labour Union of the state-owned giant Commercial Bank of Ethiopia (CBE), and the management of the bank are in dispute as CBE undergoes restructuring.

The Labour Union, which has a total of 29,000 active members, opposes the planned restructuring claiming it overlooks benefits, salaries and promotions. Since the restructuring process began at the managerial level two months ago, over half of the members of the Labour Union have lodged grievances against the management of the bank.

"We have been asking for salary scale adjustment for the past five years," said Markos Ayalew, secretary of the Labour Union, "and we were told that the restructuring will address it, which appears to be untrue."

The restructuring study was conducted over two years by the Frankfurt School of Finance & Management, a German private business school founded five decades ago. The restructuring came into effect two weeks ago at non-managerial level. CBE has over 32,739 employees including about 3,000 with managerial portfolio and 29,788 clerical workers, and the bank operates 1,270 branches across the country. During the first three-quarters of the current fiscal year, the bank has received 71.5 billion Br in deposit and disbursed 63.7 billion Br as new loans.

"The restructuring came into the scene to make contributions to the benefit and growth of the bank and its employees," according to Belehu Takele, communications manager at CBE. The bank welcomed Bacha Gina as its new president two weeks ago, replacing Bekalu Zeleke who served as president for a decade.

"The restructuring aims at improving the bank's management system, upgrade operational excellence and promote business growth," said Belehu.

He also adds that the restructuring was conducted with the involvement of the employees and is based upon the collective agreement reached between the two. The first collective agreement between the bank and the employees was signed in 1973. The Union, which recently changed its executives, renegotiated with the bank 11 times and had amended the collective agreement in 1977.

The heads of the Labour Union differed with Belehu's assertions.

The Labour Union also claims that the restructuring is carried out contrary to the collective agreement between the Union and the Bank. Employees' educational qualifications, performance and recommendations are key factors stated in the collective agreement for promotions, claims the Labour Union. The Union was established with 500 workers and 1,200 Br capital, which has since grown to 61.7 million Br. The Union has invested in shares with Habesha Breweries, Alliance Transport Services and the International Cardiovascular Hospital.

"Today, promotions are done with recommendations, ignoring the other parameters," claims Melese Kassa, who works at the main branch and assumes new a position as Senior Bank Business Officer with the restructuring.

He was an officer of district monitoring and compliance before the new structuring folded his department two months ago. He claims that he was floated for almost two months until he got his current position.

The bank has the right to conduct any type of restructuring unilaterally unless the two parties reach an agreement in advance to involve the Labour Union in the process, according to Mehari Redai (PhD), a university lecturer at Addis Abeba University (AAU) School of Law.

"As the two parties have done in the past, they need to sit down and negotiate a resolution," said Mehari.

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