Standard Bank Group welcomes Labour Court ruling
12 November 2010

Standard Bank Group has welcomed the Labour Court ruling and believes that it vindicates the bank's actions relating to the retrenchment process.

In his judgement, Judge Robert Le Grange said that all consultations between Standard Bank in South Africa and affected staff that had already been concluded should be considered final and that all ongoing consultations should continue.

He agreed with Standard Bank's submission that Standard Bank and the union SASBO consult again on Tuesday 23 November 2010 to discuss outstanding matters including the number and profile of affected staff, the estimation of the cost savings from alternative measures and the projection of estimated costs savings brought about by the retrenchments.

Judge Le Grange ordered that two additional days be set aside for further consultation should Standard Bank and SASBO be unable to reach agreement on 23 November.

Suren Reddy, Director Employee Relations at Standard Bank, said that he was surprised by SASBO's allegation that Standard Bank had failed to meaningfully engage with the union. He said Standard Bank and SASBO had engaged in consultations between 11 October 2010 and 21 October 2010 in accordance with an agreement between the parties which regulates the procedure for handling dismissals based on operational requirements.

"At no stage until 28 October 2010 did the union indicate that it was dissatisfied with the consultation process. Throughout the process the union was advised of the procedure that the bank intended to follow and at no stage prior to October 28 2010 did SASBO object to the process. The union was fully apprised of the procedure that would be followed," said Mr Reddy.

In his affidavit, Mr Reddy gave extensive details of the consultation meetings with SASBO as well as all the other correspondence between Standard Bank and SASBO on the retrenchment process. The first official consultation meeting took place on October 11 2010. During this meeting, Standard Bank outlined what procedure it intended to follow and the fact that it was complying with the Code of Good Practice on Dismissals Based on Operational Requirements and the DBOR Agreement between the bank and SASBO. A slide presentation was made demonstrating both the process that the bank intended following and the reasons for the proposed retrenchments. The presentation pointed out that there was no alternative option but to consider dismissals in addition to other austerity measures.

A second consultation meeting between the Standard Bank and SASBO took place on October 21. All information pertaining to questions raised by SASBO during the consultation process on October 11 and thereafter was provided and alternative suggestions by SASBO were dealt with in detail. There was detailed discussion around selection methods and criteria. At the end of the meeting, the union was specifically asked whether there were any other questions or issues that they wished to raise or address. SASBO said that there were none. Standard Bank indicated that it would then proceed to address letters to individual affected employees and a copy of the proposed letter was provided to the union.

Standard Bank's clear understanding at the conclusion of this meeting was that SASBO fully understood the process that had been suggested.

Consultations with affected staff took place during the week of 25 October to 29 October. A material number of these were completed, while a number of consultations continued into the following week. Of the 453 impacted SASBO members only 11 consultations have not been concluded. These are due mainly to employees being on maternity leave or other forms of leave.

Affected employees were given detailed reasons as to why their particular position was affected and the operational rationale was set out. Each employee had an opportunity to discuss and consult about the operational rationale pertinent to their position as well as alternatives. A number of individuals did present facts as to why their position should not be made redundant or presented alternatives. Where such reasons or alternatives were accepted, the individual concerned was not placed in the redeployment pool or retrenched.

As a result of these consultations, the number of affected employees in South Africa has reduced from 1752 to 1670. Accordingly, 82 fewer employees are affected as a consequence of the consultation process. Of those consulted, 644 have been selected to retain their positions, 18 have been redeployed into lower graded roles. A total of 676 employees are currently in the redeployment pool and efforts are under way to establish if there are any vacancies where they can be accommodated. In total 160 employees have accepted voluntary severance packages and 14 employees have taken voluntary early retirement. There are 148 employees who are still being consulted. Although the final numbers cannot yet be determined, just over 1000 employees are now likely to be affected. This number could further reduce as a consequence of redeployment efforts and the consultation process that still needs to be completed.

On 28 October, SASBO addressed a letter to Standard Bank. For the first time SASBO alleged that the bank had failed to meaningfully engage with the union. "This letter was surprising in the context of the consultation process that had been concluded on 21 October 2010," said Mr Reddy.

Mr Reddy emphasised that the bank and SASBO have had a sound, constructive relationship for many decades and the bank considers the union an important stakeholder in its business. "The Labour Court litigation process will hopefully not impair a relationship which is valued by both parties," he said.

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