Bank strike looms as salary increase talks hit deadlock

The banking industry is on the brink of a labour crisis after unionised staff met on Tuesday and resolved to go on strike if their employers fail to agree on a new collective bargaining agreement (CBA) on Thursday next week.

Banks could see up to 25 per cent of the workforce walk off the job, leaving their superiors in management struggling to keep their banking halls open, unless the two parties settle some sticking issues that forced negotiations to collapse after eight months.

The talks, which started in December to replace a CBA sealed two years ago, collapsed after the two parties differed on eight issues, including new basic salaries and leave days.

This follows months of troubled negotiations that were at one point stopped by a controversial court order allegedly barring management from discussing a “special issue” and at another by union demands that one top-tier bank’s representative be barred for his abrasive and threatening behaviour.

The Banking Insurance and Finance Union of Kenya (BIFU), representing some 8,000 members, says workers will go on strike a week after September 3 if the meeting does not settle the outstanding issues.

“The workers will go on strike seven days after September 3 if an agreement is not reached,” said Tom Odero, the BIFU organising secretary.

Mr Odero said the banks, through the Kenya Bankers Association (KBA), has not been negotiating in good faith, leading to the stalemate.

The impending strike would involve subordinate staff, supervisors, loans officers and clerical workers, including tellers.

The last major strike in Kenya’s banking industry was seen in March 1998 when workers protested the government’s decision to raise interest rates on employer-subsidised loans.

Thousands of workers went on strike for days, affecting the operations of Kenya Commercial Bank (now KCB), Commercial Bank of Africa, National Bank and Standard Chartered Bank Kenya.

The latest dispute was filed in June with acting labour minister Raychelle Omamo, who helped set up the upcoming meeting to give the parties another chance to resolve their differences. Willy Kimani, the conciliator appointed in mid-June, had little luck bringing the parties close to a deal, the unions say.

But 10 days ago, KBA’s chief executive Habil Olaka wrote to Mr Kimani saying he thought progress had been made before BIFU decided to head for the streets.

“Of the 37 clauses in the CBA, only a few are outstanding, some of which we had covered substantial ground (even) though we had not reached a consensus by the time this dispute was revisited by the union on August 14, 2015,” Mr Olaka said.

The stalemate means unionised workers continue to receive benefits set in the 2013 CBA, which officially came to an end in March this year.

A new agreement will see a rise in benefits, if any, backdated to March when the new CBA will take effect for another two years until February 2017.
That will, however, depend whether the sticking points will be resolved.

Top among the issues is the question of minimum basic salaries for the industry, which currently stand at a gross of Sh55,860. BIFU wants this raised by seven per cent, taking it to Sh59,770.

Mr Odero says employers want to retain the status quo and all the other matters in dispute.

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The union has proposed that the severance pay, currently at one month’s pay for every year worked, be raised to one-and-a-half month’s pay.

Mr Odero said lenders like KCB and Barclays have in recent years voluntarily offered the higher severance pay to their employees under their respective voluntary early retirement schemes.

“We want all the banks to officially adopt this. An employee who has worked for years and is forced to leave employment without a fault on his part deserves better,” Mr Odero said.

He said the employers had offered to raise the owner-occupier house allowance from the current Sh12,000 to Sh13,000 but later rescinded the decision, sowing discord among workers who were told about the proposed figure.

The union wants a lunch allowance of Sh700 to be paid to those working during lunch hour, noting that the allowance is currently paid to only those working out of their regular station, and only at the rate of Sh400.

BIFU also wants the shift inconvenience allowance — ranging between Sh1,200 and Sh1,800 — to accrue daily whenever one is on such shifts and not monthly as is currently the case.

“This allowance has been interpreted by banks to mean it is paid once a month. This translates into a pay of about Sh50 per shift,” Mr Odero said.

The union wants the premium paid for each of its members’ medical scheme to be raised from the current Sh87,000 to Sh150,000 to enable them get better healthcare services.

The prevailing premiums allow an employee to access outpatient services capped at Sh100,000 per year and inpatient services of up to Sh300,000.

Mr Odero said some banks like StanChart and Co-operative Bank have seen the inadequacies of the current medical covers and asked their staff to top up the premium by contributing up to Sh15,000 annually.

BIFU also wants leave day entitlements to be raised to 30 days from the current range of between 24 and 26 days.

Employers have offered unionised staff 26 days, which BIFU says is unfair given that management staff get 32.

In addition, BIFU says the biggest problem is the alleged coddling of top managers by banks at the expense of lower cadre staff.

“Basically, they don’t want to raise compensation of our workers so they can maintain the hefty bonuses paid to the managers,” Mr Odero said, adding that some banks have paid individuals up to Sh100 million in bonuses.

The union has accused KBA of negligence in handling the latest round of labour negotiations, accusing the association of sending low-level representatives who are not able to commit their banks to issues discussed.