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IDBZ under fire over retrenchments

By Africa Moyo

Plans by the Infrastructure Development Bank of Zimbabwe to retrench nearly half its workforce have not only come under fierce resistance from the Zimbabwe Banks and Allied Workers Union, but have also shed light on the huge salaries top banking executives take home while lower level staff face uncertain futures.

Infrastructure Development Bank of Zimbabwe
Infrastructure Development Bank of Zimbabwe

IDBZ says it will lay off more workers in addition to the roughly 25 who accepted voluntary retrenchment.

While non-managerial employees grapple with the prospect of being retrenched, the CEO – Mr Charles Chikaura – is understood to be raking in US$35 000 in salary and perks monthly; a figure IDBZ would last week neither deny nor confirm.

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Last week, the bank said it elected to slash its workforce to suit present business circumstances.

But Zibawu, a union representing about 5 000 banking sector employees, believes that the cull sacrificed ordinary workers whose jobs could be easily saved if the IDBZ boss halved his package.

In a March 12, 2015 letter to Mr Chikaura and copied to the IDBZ board and national workers committee, Zibawu general secretary Mr Peter Mutasa said the retrenchment exercise seemed tailored to “protect executive management’s current benefits”.

“You will recall that we took issue last year with the level of your executive and managerial salaries. To illustrate our point, we used your monthly salary and benefits of US$35 446 as reported then and not rebutted, which in our view and by all standards is way too high to be sustainable at an institution such as IDBZ.

“ . . . your salary is almost thrice the reported salary of the Head of State and Government (President Mugabe). More fundamentally, with your monthly salary, you are able to pay all the 44 non-managerial employees earning a total of US$32 512 15 (and) you will still remain with US$2 934 change every month . . .

“We implore on your executive to put the company and national interest ahead of personal gains and profligacy in order to develop our nation,” said Mr Mutasa.

Even if Mr Chikaura’s salary were reduced to US$17 500, the union said, it would still be “very high and not justifiable at a State corporation”.

At a reduced US$17 500, Mr Chikaura’s salary would still be 27 times that of the lowest banking sector earner.

The lowest paid banking sector employee earns US$273 per month.

The IDBZ withdrew lunch and transport benefits because of the challenging economic environment.

IDBZ public relations executive Ms Priscillah Mapuranga could not comment on the CEO’s salary but indicated that the retrenchment exercise was overwhelmingly successful.

“On the issue of salaries, the bank would like to highlight that salaries within the IDBZ are in line with those obtaining in the financial services sector and they are also contractual,” said Ms Mapuranga in a terse response.

She, however, noted that the bank had exercised “its right to retain staff who are key to the operations and growth of the bank, particularly in the infrastructure division”.

Though Ms Mapuranga said IDBZ had parted ways with staff that held managerial positions, with five being senior managers, she could not be drawn to disclose how much the bank would spend or the money that will be saved in the long-term as a result of the exercise.

Public Service, Labour and Social Welfare Minister Prisca Mupfumira recently said Government would tighten retrenchment regulations to avoid unnecessary dismissals.

Minister Mupfumira indicated that before a company retrenches, it should submit its total wage bill, highlighting how much would be saved by the proposed lay-off.

“They should also submit the company board of directors fee structure, including allowances paid to the directors. They should also submit measures previously undertaken by the company to avoid retrenchments,” said Minister Mupfumira.

Some analysts say it would be prudent for companies to retrench high-earning staff rather than ordinary workers, whose salaries only make up a fraction of the wage bill; while others point out that the high earners usually provided the critical resource pool for organisations.

The IDBZ is a statutory body established by the Infrastructure Development Bank of Zimbabwe Act (Chapter 24:14), and came into being on September 2005 following the amendment of the Zimbabwe Development Bank Act.

It is mandated with promoting economic development and growth and to improve the living standards of people through development of infrastructure including housing, amenities and utilities. The Sunday Mail