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Banks and unions should tackle underlying issues to job cuts

Over 40 000 workers could embark on a national strike on Friday to stop retrenchments in the industry.
Increased digitisation is not driven by banks but consumer behavior. Image: Waldo Swiegers/Bloomberg

Over 40 000 banking sector workers are expected to take to the streets on Friday, in a national bank strike led by finance union Sasbo. But this could prove futile if the underlying factors that have led to the changes in the banking industry are not dealt with. 

There are three main demands that Sasbo has put forward, starting with a moratorium on job losses, the regulation of CEO and executive salaries and a just transition that focuses on reskilling and upskilling workers for the fourth industrial revolution. 

Banking Association of South Africa (Basa) managing director Cas Coovadia says what needs to happen is for the banks and Sasbo to sit down and map out how they are going to address the underlying issues of low economic growth and the evolution of banking in an increasingly digitising economy. 

“You can’t freeze retrenchments, because if you freeze the retrenchments of 100 people today, in six months’ time you are probably looking at the retrenchments of more people,” said Coovadia.


The banks, represented by Business Unity South Africa (Busa), have launched a court challenge to interdict the protests on technical terms, saying the strike notice that union federation Cosatu submitted was not valid for the strike to be protected. The matter will be heard on Wednesday.

Coovadia made it clear that business respects Sasbo’s right to strike, however this has to be done within the regulations and rules of the country. 

Sasbo Secretary-General Joe Kokela told Moneyweb that the strike will go ahead as planned on Friday, saying it’s a lawful and protected action. 

Retrenchments not an operational issue

Kokela described the potential retrenchments by the banks as “an act of corporate greed and nothing else”.  

Standard Bank announced it would be closing 91 branches as part of its efforts to digitise its retail and business banking, placing 1 200 jobs at risk. Two months ago Nedbank confirmed that it was in talks with 1 500 employees over potential job cuts, while reports state that in excess of 800 jobs could be at risk at Absa, as the bank rolls out its restructuring model.  

All three banks were contacted by Moneyweb and did not respond to questions as to whether they would accede to Sasbo’s demands on freezing the job cuts process, or indicate how many jobs had already been affected. 

Absa said the restructuring process isn’t complete, thus it can’t provide final numbers on the number of jobs that have been affected. Absa together with Nedbank mentioned that they’re committed to engaging with Sasbo on its concerns. 

Kokela said banks are hiding behind “operational requirements” to retrench workers through Section 189 of the Labour Relations Act,  which is “wrong and misplaced”. 

Kokela said digitisation, or the advent of the fourth industrial revolution, is not an operational requirement – especially when there are consumers who fall in the lower groups (one to four) of the Living Standards Measure.

“Those are people that are struggling with banking and when you look at what the banks are doing, it excludes poor people in the system,” said Kokela. 

But Coovadia said banking models are not driven by banks but rather customer behaviour. 

“Banks are responding to customer pressures that say we want banking services now, conveniently, cost-effectively and through different platforms,” said Coovadia, adding that this new reality of banking is a worldwide phenomenon. 

Little to no disruption

Sasbo will give the banking sector seven days to respond to its demands, failing which Kokela said it will embark on another strike. “It will be for a longer period because we cannot allow this to happen.”

In the meantime, Basa has assured the public that its members are taking precautions to ensure that banking services are not disrupted on Friday. 

Consumers have been encouraged to use digital banking platforms. Absa has also encouraged its corporate clients to consider scheduling their payments, transactions and other services to earlier dates.

Similarly, the South African Revenue Services has encouraged taxpayers to submit their payments or conduct other tax-related transactions two business days in advance. 

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Unions have too much power in this economy.

you have no idea what you are talking about – I worked briefly at STD Bank trustee services – once had 30 mins overtime – was told by the manager that she could not authorize it!!

do you know how much overtime bank staff are working and not getting paid for it???? must justify/explain why they have overtime!!! and yet directors are driving porsches, Ferraris etc!!! there is a helluva lot going on that you don’t know about!!!!!

Well if I was refused overtime pay due to me I would simply get up and walk away at knock off time. A sort of personal “strike”. The outcome might be unpleasant from both my and / or my employer’s perspective but that is the free market and eventually the balance between demand and supply will determine the end result, but only temporarily. No? Problem we have, there is currently an over-supply of disposable workers and a shortage of top players. Inequality cannot be dreamed away. There is only one gold medal for the winner in any race. Some of think the unions are too strong while others that the executive body is too strong. Competition is part of life – it has been throughout the ages. Starts with the winning sperm chasing to get to the egg in the womb. The first race in your life but not the last.

If only the unions could be educated to realize that the companies retrenching (mines, banks, etc) are merely doing so in reaction to the dismal economy bought about by the ANC’s disastrous policies. The real enemy here is the lack of economic growth and this is squarely the fault of Government. Ironically, by doing what they are doing, the unions are merely speeding up their own demise. I doubt they see this.

“What happens when an unstoppable force meets an immovable object?”

When government-intervention in the labour market creates an unproductive and militant labour force, and this force results in the inevitable decline in economic activity and job-losses, something has to give. This collision is called retrenchment, and it was government who skipped the red traffic- light.

Problem is that most politicians (all over the world) are either colour blind or simply blind when it comes to interpreting the traffic signals. Self cantered parasites selling dreams to electorates in order to further their personal ambitions. Probably time for them to be replaced – as their predecessors the royals & nobles were.

If we just moderately effective Government and sound economic policy none of these protests would be needed. Instead the entire country is beholden to a weak, pathetic and incompetent ANC Government.

Striking against job cuts is bizarre! Companies will hire/retrench over long periods of time as their fortunes rise and wane. Striking makes no difference to companies fortunes (perhaps you could argue hurt).

Striking to prevent job losses will only cause more losses! IT highlights how dependant these companies are on people. Banks will replace people with Technology! Simple!

The sooner the better. Unions are a completely destructive force nurtured by the incompetent ANC. I never see the inside of a bank any longer ( for many years already) and all else I can do via Internet I do. You do not strike if you have the privelege of a paid job. Shameless bunch

In one respect you may be correct, but do not forget that the growing number of jobless people will generate its own dsestuctivle force. Without pay, nothing will be purchased and the economy continues to shrink. The catastrophic mistake by our “heroic” liberating leaders was to focus on redistributing the exciting cake in 1994. A cake might feed 5 people but try share that with 50 people. On top of that there are still 5 people left to bake. Hence we are where we are. Instead of Radical Economic Transformation (Redistribution – like all good commies preach), focus should have been on Radical Educational Transformation. Teach a man to fish!

the biggest banks to lead bank in the 4th industrial revolution will not have physical branches

When ever I do walk into my bank, not often, there are always queues – and a host of staff members walking around, chatting to one another – or doing nothing.
Once the banks have retrenched excess staff I look forward to seeing their fees reduced. Well I can wish, can’t I.

TaffyDee. If your branch was correctly structured with a MANAGER who likes to manage in charge, you would find a branch with fewer staff, all at work with no time to walk around and chat.

When Standard Bank shares R209 MILLION with just SIX executives, and throws mere bones and breadcrumbs to the rest of the staff, then they are positively ASKING to be punched on the nose!

The unhinged success of Personal greed at corporate level – at the direct expense of the greater body of powerless workers, will be the DIRECT undoing of Capitalism as we know it.

The banks execs have done a wonderful job to grow profitability in this hostile economy and have therefore been well compensated by the remco’s with approval from shareholders.

The banks need these top execs. The bank however is not a charity and simply cannot keep thousands of redundant staff as it closes close to a 100 branches. Where do you expect these staff to end up if they have no useful skills that can be immediately transitioned and used?

How much the executive gets paid is a separate issue to whether staff is redundant. Would paying the executive less make the excess staff non-redundant? The classic whatabout argument – the unions employ this frequently.

Sure, comrade!!

Bet you raise your loan capital by shaking a can at traffic lights!

Unfortunately this is what happens in a socialist economy……makes no sense and is the beginning of slide into general collapse of everything else. Starts with institutions that control the finances and economy….ends with anarchy and revolution.

Love the knee-jerk responses… But there are a few points that critics need to get their heads around…

1. No problem with “Compensation for contribution”.

The issue is that it seems to have become wildly disproportionate, and is far too top heavy in dispersion.

2. The issues of the “value provided” by the C-suite seem to be decided by nothing less than an incestuous coterie of senior executives and their pals (the one hand washing the other).
With the entirely predictable outcomes!

3. Would pre-empt all this if the entire employee body had a hand in deciding on the compensation and bonuses for everyone.

4. Work provides more than just a job. It provides dignity and fulfills a social need.

5. BLATANTLY ignore this universal human / social need, and there will be NO NEED for the excluded masses to support a system that doesn’t work for them!

6. The lessons from the French Revolution seem to have been forgotten, or at very least glossed over by many of these commentators. Greed, and the preservation of this fuedal system of gross inequality, was THE driving force for revolution.

This very same root cause is present here!

Better wake up while you still have your head attached!

Maybe the masses should start working for the system instead of looting and suckling off the system…as the anc and eff communists do?!

I guess if cars were invented only now the trade unions would strike against them because cars would eliminate jobs in the horse drawn transport companies.

Interesting observation I read about was how at that time it was only horses that were no longer ever able to be productively employed. Horses are mainly only used for entertainment today. With the 4IR however, it is man that becomes unemployable. Not a pleasant thought.

Wait, am I reading this correctly? “I really want to keep my job, therefore, I am going to go on a strike!” That doesn’t make a whole lot of sense.

Interestingly, the bank / loan shark Capitec is adding staff AND branches. Core difference is Capitec has median salary of around R280k which is HALF that of the big 4. More than half the workers at the Big 4 earn over R600k? That does not sound sustainable. Getting rid of cheap workers won’t fix the problem IMHO.

Where are you getting median figures from ? do banks publish them somewhere ?

Cheetah, it was a recent moneyweb article about ceo vs staff salaries, google “bank ceo salary median”

Do you begrudge the top “brass” at the PIC for example earning multimillion Rand salaries as well?

At least the bank’’s executives, who have the same responsibilities to their clients and investors,8 don’t steal!

With reductions in manpower, will my monthly fees (and all new named fees) be going down anytime soon??

Unfortunately no. Advertising, sponsorships and fringe benefits will continue and someone needs to pay for that.

There is a solution. South Africa needs to take the lead in Sovereign Backed Electronic Legal Tender. It will create thousands of FinTech jobs, just like MPESA did in Kenya.

End of comments.





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