ZIMBABWE’S financial services sector stands to lose at least US$3 million daily in deposits after a union representing bank employees gave two-weeks notice to go on strike over a salary dispute, in a move that threatens to bring business in the country to a halt, the Zimbabwe Independent has learnt.
The workers are demanding an increment backdated to April amid massive retrenchments that have resulted in at least 1 000 bank workers losing jobs this year.
The strike action will impact heavily on the corporate sector whose financial transactions are done through banks, as well as ordinary workers who access their salaries through financial institutions. The 14-day notice, which excludes Sundays, lapses on September 9.
The workers’ union feels employers should increase the US$273 monthly salary earned by the lowest paid shop-floor worker.
The fragile banking sector, which is emerging from a streak of confidence loss during the hyperinflation era, grew bank deposits to US$1, 8 billion in June from US$1, 36 billion last December. This translates to a monthly average of US$72 million in deposits in the first six months of the year, meaning that banks handled an average of US$3 million a day.
Apart from the financial cost of the strike due to loss in deposits and payments from debtors, the industrial action could also inconvenience the public, especially civil servants whose salaries are expected to be processed at the time of the job action.
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“The 14-day notice follows a deadlock that was declared at the National Employment Council over cost of living adjustment negotiations for the period April to June 2010,” wrote Zibawu president Peter Mutasa in a letter dated August 24.
Zimbabwe law dictates that workers intending to go on strike should notify authorities two weeks before the industrial action.
“The Bank Employers Association has demonstrated lack of seriousness in their approach to the negotiation process leading us to conclude that they are not negotiating in good faith,” the letter read. “They have shown unwillingness to resolve the matter by refusing to have the matter referred for compulsory arbitration arguing that this dispute is one of interest (sic).”
When reached for comment yesterday, Earnest Chisi, chairperson of the Bank Employers Association, referred all questions to the Bankers Association of Zimbabwe (BAZ). Efforts to get a comment from BAZ president, John Mushayavanhu, were in vain as his mobile phone yesterday rang unanswered.
South Africa headquartered Stanbic Bank this week said rising salary demands were “negatively” affecting the bank’s operations, a statement that suggests an unlikelihood of any further increments. Staff costs for the bank more than doubled to US$5 million in June compared to December 2009 figures.
“Operating expenditure was negatively affected by the high costs and unsustainable utility bills,” said Stanbic chairman Sternford Moyo in a statement accompanying mid-year unaudited financials.
On the other hand, Barclays Bank, in its interim results published last week, announced that 206 of its employees had so far taken up voluntary retirement following a restructuring exercise.
“A few initiatives pursuant to this restructuring exercise will continue into the second half,” said Anthony Mandiwanza, Barclays chairman. The bank also intends to dispose of its custody business in a move aimed at streamlining operations.
BancABC reported that staff costs, which accounted for 58% of the group’s total expenditure, increased by 30% in Zimbabwe as a result of “market-wide salary increases to unionised staff”.
A growing discrepancy between lowest paid clerical staff and junior management at a time when banks had increased service charges to remain afloat has reportedly widened differences between banks and employees.
Rising bank charges in the liquidity-short market prompted Reserve Bank chief Gideon Gono to advise banks to revise salaries and perks of management arguing that bosses were “living like angels” with “utopian packages”.
“The Central Bank has and continues to receive multiple genuine representations from the banking public on the excessive bank charges that are being levied by some banks, said Gono during the Monetary policy statement last month.
“Under the current conditions of reduced general market liquidity, shareholders, boards of directors and management teams in banking institutions must have a frank re-look at their pay structures and other overheads. The current scenario where bank management in some institutions get paid and live like angels whilst their own financials are suggesting otherwise cannot be sustained. The banking corporate and individual sectors cannot therefore, be made to sustain utopia-style packages that do not reflect the Bank’s core income streams benchmarked on reasonable charges and normal trading activities.”
The central bank chief warned that should banks continue to charge high services charges, the apex bank would be “dragged to the extreme points” and prescribe limits on bank charges”.
The International Monetary Fund, like the employers association, earlier this year advised both the public and private sector to exercise wage restraint, a recommendation that left downtrodden workers in both sectors resentful.
Zibawu last embarked on a job action in 2008 when bank employees went on a go-slow citing an unbearable cost of living triggered by the then unprecedented economic meltdown.
Zimbabwe has a diversified banking sector comprising 26 banking institutions, 16 licenced Asset Management Companies, and 95 operating microfinance institutions under the supervision of the Reserve Bank.
Bernard Mpofu
