Summersault: BoU To Probe DFCU Bank On Sacking Of 400 Ex-Crane Bank Employees!

Summersault: BoU To Probe DFCU Bank On Sacking Of 400 Ex-Crane Bank Employees!

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By Andrew Irumba

The Bank of Uganda (BoU) is investigating circumstances under which DFCU Bank sacked 400 former employees of Crane Bank Limited (CBL).

Ms. Charity Mugumya, the BoU communications director on Thursday confirmed that the Central Bank received the October 23 letter from the former Crane Bank staff, demanding terminal benefits.

The letter in form of a notice to sue BoU has since been forwarded to the legal department, pending probe, Charity said.

Without revealing the format of BoU investigations into the circumstances under which DFCU Bank sacked former Crane Bank employees, Ms Mugunya wrote: “With regard to what action BoU is going to take, BoU intends to review the entire record on the termination process to ascertain whether there was any of these terminations that were not done in accordance with the Employment Law before any response in given.”

The BoU response came a day after the infuriated former workers of Crane Bank addressed a news conference at Hotel Triangle on Wed.in company of their Lawyer Isaac Ssemakadde head of Centre for Legal Aid and indicated that they had written to BoU, demanding for Shs48 billion in terminal benefits. The affected threatened to sue BoU and DFCU Bank if that money is not remitted within 45 days.

Former Crane Bank workers with their lawyer Isaac Ssemakade of Legal Aide lawyers address the press on Wed.at Hotel Triangle Kampala.

Ms Mugunya also added that “The response will be given before the 45 days’ notice expires.”

Sources close to Bank of Uganda told TheSpy Uganda that the legal department was tasked to study the agreement BoU signed with DFCU Bank before they transferred some of the Crane Bank assets and liabilities.

Inquiry

This agreement is now a subject of a House committee inquiry because the Auditor General in his special audit report to Parliament queried it. Since the details of this agreement were not disclosed to the public, it remains unclear whether in the disputed deal, it was BoU or DFCU Bank to foot the bill in case of any sacking of the former Crane Bank employees.

In exercise of its powers as receiver Bank of Uganda, with effect from October 20th 2016, pursuant to Sections 87 (3), 88 (1)(a) & (b) of the Financial Institutions Act 2004, took over management of Crane Bank Ltd and assured employees with running contracts that their jobs would be protected.

Governor Emmanuel Tumusiime- Mutebile assured Crane Bank workers and depositors that the operations would continue normally and explained that the Bank was significantly overcapitalized and therefore posed “a systemic risk to the stability of the financial system”.

But after BoU sold some of the Crane Bank assets and liabilities to DFCU in a disputed Shs200b deal, DFCU managers retained some employees and sacked others contrary to central bank assurances.

Some former Crane Bank managers of upcountry branches were recalled to headquarters in Kampala and relegated to tellers before they were sacked.

Background

When the affected employees went to DFCU Bank to demand compensation, the DFCU Bank asked them to go to Bank of Uganda.

Tired of being tossed around, the former Crane Bank employee, reacted with furry, accusing DFCU of breaching the constitutional, statutory and common law duties it owed to the applicants and all other members of the represented class as the transferee of their respective employment contracts, thereby causing them loss and injury.

Counsel Ssemakadde, accused DFCU of sacking Crane Bank employees without following the formal and legal procedures.

“We welcome the BoU probe into the mass layoffs of ex-Crane bank employees on February 24 2017 and we hope that it shall be done in a transparent, inclusive and participatory manner,” he said.

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