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VBS Curator reduces costs of the Bank

19 October 2018Louise Brugman, On behalf of the curator of VBS, Anoosh Rooplal

Over the past months, the curator of VBS Mutual Bank, Mr Anoosh Rooplal, has had to reduce all non critical costs in an attempt to align cash inflows with the cash outflows. Cash expenses have been exceeding cash income earned by the mutual bank.

The curator has closed branches with low traffic, including the Thavhani, Johannesburg, Durban and the Sibasa branches. The two remaining branches, Thohoyandou and Makhado have been reduced in size and will continue to service the loan account holders, whose contracts remain binding with VBS.

The VBS head office has also been streamlined and staff have been moved into one office block to make more space available for potential new tenants. Unused and redundant assets will be sold and all proceeds will be to the benefit of the creditors of the Bank, including municipalities, trade creditors and the remaining retail depositors who currently have over R100 000 deposited in the mutual bank.

The curator, as a necessary last resort, unfortunately has had to reduce the salary costs of the mutual bank. The consultative process began on 13 July 2018 with a notice to all staff that the Bank needed to reduce the staff compliment. According to the Labour Relations Act, a conciliation period of at least 60 days and with four conciliation meetings with the CCMA, the SASBO union and appointed representatives of the non-unionised members was followed.

Anoosh Rooplal noted, "We have unfortunately had to reduce the staff compliment at the Bank. This is always a tough decision and we have been comprehensive and transparent to all staff members in the process. We have followed an extensive consultation process as prescribed by the Labour Relations Act with the inclusion of the CCMA from the start".

On 12 October, retrenched staff were informed of their retrenchment packages and received retrenchment packages of notice pay, severance pay and any leave pay due.

A process of appointment for the remaining 26 staff members was also conducted and staff were invited to apply for advertised positions. Letters of appointment were also made to 26 staff members on 12 October 2018, with letters of regret being extended to all unsuccessful candidates. All 26 positions have been filled with VBS staff members. The 26 staff are involved in collections, operations, and administration aspects of the Bank. The appointments include two general managers.

On 16 October, further correspondence was issued to the 94 retrenched staff with additional details included as to which sections of the Basic Conditions of Employment Act were followed for each of the payment packages and individual details to how that applied to each staff member. There were also 83 eligible staff members who were informed of their entitlement to a 13th cheque.

Consequently, the curator has concluded a Section 189A process as per the Labour Relations Act, 2001 with VBS staff.

Today, the HR manager and General manager of Operations are at the branches to answer any further queries, should retrenched staff still be unclear as to how the packages were calculated.

Rooplal concluded, "We have made available emotional and financial counselling for the family members of the retrenched staff. In addition, we are providing all the necessary administrative assistance to all retrenched staff in order for them to claim unemployment benefits from the Unemployment Insurance Fund and for them to obtain their tax directives from SARS".

 

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