Redundancy And Workers’ Benefits: A Case Study of Union Bank PLC – By Gbemiga Bamidele
Redundancy is defined under Section 20 (3) of the Nigeria Labour Act as the “Involuntary and permanent loss of employment caused by excess manpower”. However, the Act does not define the events and circumstances that could lead to termination of employment due to excess manpower.
Unfortunately, Union Bank carried out a redundancy exercise between 2006 – 2008 but refused to pay the balance of their full redundancy benefits when they were exited from the service of the bank.
Consequently, by the provisions of the collective agreement between the banks, Nigeria Employers Association of Banks, Insurance and Allied Institutions (NEABAIFI) & Association of Senior Staff of Banks Insurance and Financial Institutions (ASSBIFIE) of 2005. The pensioners are entitled to be paid their respective redundancy benefits, computed using the parameters set out in the collective agreement Article 5 thereof which governs the pensioners term of employment and condition of service.
Having ruminated on the term, redundancy and workers’ benefits, a discerning mind would be concerned on the synergy, symbiotic and/or relationship between all these and the subject matter for the case study, the Union Bank, Plc.
On 5th December, 2024, the National Industrial Court in the Ibadan Judicial Division, holden at Ibadan before His Lordship, Hon. Justice Hassan Mohammed Yakubu delivered a judgment in a suit between Union Bank, Plc and Onu Augustine and 61 Others. The judgment is in respect of the refusal of Union Bank, Plc to pay the claimants, their entitled redundancy benefits, having carried out a redundancy exercise in 2006 – 2008 when it retired the claimants in batches.
The claimants were all retired by the defendant when they were yet to attain the age of 60 and have not put in 35 years of service with the defendant. This brings them under the redundancy clause as clearly spelt out in the collective agreement that their condition of service is governed by: “The collective agreement between Nigeria Employers Association of Banks, Insurance and Allied Institutions (NEABIAI) and Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) dated May 11 – June 1, 2005.
That they exited the employment under the defendant by involuntary loss of employment through no fault of them and are therefore entitled to compensation as prescribed by the relevant provisions of the collective Agreement, particularly Article 5 thereof. That when it became obvious that the defendant was not willing to comply with its financial obligations to the claimants, they applied/demanded for the payment of their severance/redundancy benefits.
His Lordship, Hon. Justice Hassan Mohammed Yakubu says it is “my considered opinion that the claimants have successfully proved their case as required by law to be entitled to the reliefs sought. I so hold”.
Subsequently, and without much ado, the Honourable Justice resolved the issue for determination in favour of the claimants against the defendants and entered judgment as follows: “That defendants should pay the claimants respectively the amount specified against each of their names as per the statement of facts which is a total of N240,635,782.46 (Two hundred and forty million, six hundred and thirty-five thousand, seven hundred and eighty-two naira, forty-six kobo), being the outstanding balance of what is due to them as outstanding benefits”.
However, in all these, something seems negatively unique about Union Bank, Plc! The management has consistently forgotten that the claimants were once part of them and their numerous success. Union Bank records 138% profit growth for 2023. Nigeria’s second oldest bank, the Union Bank, Plc also recorded a pre-tax profit of N71.8billion in the June 2023 full year from the N30.2billion posted in 2022. The bank also generated gross earnings of N396.6billion during the period, marking 89% growth N208billion posted in 2022.
During the full year, the bank generated a net interest income of N90.4billion marking a 53% improvement from the N59.1billion presented in 2022.
In all these, one keep wondering while the bank will prevent their former staff from reaping and enjoying their fruits of labour by deploying ways and means towards obstructing and thwarting collection of their benefits.
This unfortunate, but deliberate act has left many of the supposed beneficiaries incapacitated, while a number of them have suffered untimely deaths! We appeal to the appropriate authorities and all concern to intervene towards ameliorating this unfortunate scenario.
Gbemiga Bamidele, Ph.D can be reached at gbemigabamidele@gmail.com.
