Kampala High Court has granted terminated former Crane Bank employees permission to sue DFCU Bank for wrongful dismissal.
Dfcu Bank acquired Crane Bank assets and liabilities following the conclusion of a purchase and assumption agreement with Bank of Uganda on Friday 27 January 2017.
Following the transaction, the Central Bank Governor Tumusiime Mutebile assured all Crane Bank staff of job security.
He said none would lose their jobs.
But over 400 former Crane Bank staff who were laid off have gone to court to challenge the termination of their jobs.
Registrar Sarah Langa on Monday said the affected former Crane Bank employees satisfied court by complying with the legal provisions of preparing a joint suit.
Lawyer Isaac Ssemakadde his clients would file a case against the bank.
“High Court has granted 10 former workers permission to represent over 400 of their colleagues who were unlawfully terminated from Dfcu Service,” said Ssemakadde.
“They are now required to publish notice to others in similar circumstances so that those who don’t wish to be part of the suit can say so,” he added.
DFCU Speaks Out
Contacted recently, Dfcu Bank officials confirmed the planned downsizing which they said was part of integration of the transferred business into the existing Dfcu Bank structure.
The officials said the move was to among others avoid duplication of roles in the combined Bank organization structure, and also on account of differences in technology and processes between dfcu Bank and Crane Bank.
Dfcu’s Head of Brand, Marketing and Communication Jude Kansiime in an earlier email informed Chimpreports that the decision to lay off the former Crane Bank workers was also due to the “rationalization of thecombined branch network to avert duplication at locations where both dfcu Bank and CBL have a presence.”
But former DFCU staff said they were “grossly discriminated against” with the bank hiring new staff to take over some of the jobs they previously had.
“We have looked for jobs in vain. Wherever we go, we are asked why we were terminated. It has been hiring new people,” said one of affected staff.
Ssemakadde said his clients were entitled to reinstatement or compensation, arguing the bank “violated numerous norms and standards in our laws.”
dfcu was started by the Commonwealth Development Corporation (CDC) of the United Kingdom and the Government of Uganda through the Uganda Development Corporation (UDC) under the name of Development Finance Company of Uganda Limited.
Later restructuring brought in DEG (of Germany) and International Finance Corporation (IFC) as equal partners with CDC and UDC, each having a 25 percent stake in the company.
Its objective was to support long-term development projects whose financing needs and risk did not appeal to the then existing financial commercial lending institutions.
But CDC was the subject of investigations by the magazine Private Eye.
Amongst other allegations, it claimed that CDC had moved away from financing beneficial international development towards seeking large profits from schemes that enriched CDC’s managers while bringing little or no benefit to the poor including job creation.
But DFCU said, “Whilst every effort has been made to integrate all former CBL staff into the dfcu Bank structure, it has not been possible to find suitable roles for all the CBL staff.”
It added: “The integration process will continue to be carried out fairly, transparently and accordance with the laws of Uganda.”
However, Francis Byabashaija who previously worked with Dfcu says Bank of Uganda should have ensured job security of the affected staff or adequate compensation after termination.