Bifm retrenchment turns ugly
As of recent Botswana’s economic sector has been hit by massive retrenchment exercises which have resulted from the closing down of a growing number of companies and factories. Botswana Insurance Fund Management (Bifm) has just joined the list with angry employees who are facing the axe planning to take the legal action.
The Botswana Gazette can confirm a brewing internal battle at one of Botswana’s largest asset management outfits as half of its staff complement has been lined up for the chop.
Through documents seen, exchanges between the management and the employees, soon to be on the retrenchment ship revealed how the acting CEO Neo Bogatsu has been working tirelessly in an effort to contain a situation that was clearly getting out of hand.
This retrenchment process, which the Acting CEO has deemed “not negotiable”, but consultative due to the nature of the issues raised, has been aggressively contested by disgruntled employees.
This emerges a few months after Bifm was wrestled out of its tender worth P9.5 billion to manage Botswana Public Officers Pension Fund (BPOPF) assets and sources deduce that this could hurt the company’s profit margins in the long run, “this creates an opportunity for the company to quickly rid of some employees since the tender was worth 30% of Bifm’s assets.”
Unconfirmed allegations had been such that BPOPF was unimpressed with Bifm’s performance and there were rumours of board room wars that saw African Alliance and Afena Capital snatch the deal from Bifm.
Information seen by this publication reveals the employees’ attempts to engage with Bifm management decrying a flouted and un-procedural retrenchment process. The employees cried that in the event, only Batswana employees are being retrenched and the exit packages proposed are ridiculous.
Between 2nd and 17th February Bifm board informed the staff about the loss of the BPOPF deal, took them through counselling sessions and then ‘fired’ the then CEO Tiny Kgatlwane. Staff members were then informed of a looming retrenchment on 24 February as the Group CEO Gaffar Hassam introduced the ‘restructuring process and the high level departmental structures’ that were to be implemented and could affect everyone.
The employees were then engaged in a meeting last week where the management sought to impose more punitive actions on the exit packages of employees soon to be laid off. Disgruntled employees who met with this publication pointed out that the separation package that Bifm had put in place was said to be ‘cast in stone’ and non negotiable. They contested it.
They accused Bifm of completely ignoring the role of the employee representative committee as well as the consultation process. In the letter to management they stated that the employer was making the consultative process a mere formality.
Judicial precedent strongly supports the motion that implementation of a restructuring exercise should be effected after consultation and not before, ‘the courts have in the past cautioned the employer from making consultative process a mere formality to be quickly dealt away with,” they stipulated in the letter.
The staff committee demanded a three month gross pay for every year worked , four times gross pay notice period and more in relocation expenses and a minimum of P100 000 for the total exit package.
The proposed separation pay put forward by Bifm offers a term of one month gross pay for every year worked with a cap of 12 years in service, the employees are still unhappy with it.
“Imagine for an employee who has worked here for more than twenty years and cannot be employed elsewhere due to age or the nature of the specialised job that it is, 12 years is a rip off!” one of the employees exclaimed citing that Bifm’s previous retrenchment exercises were more consultative and flaxen.
In a letter sent to management on 3rd March, the employees’ representative committee expressed displeasure over the conduct of the Project Manager who was appointed by management to inform them of the looming downsizing exercise.
“She proved to be defensive, insolent and insensitive to the plight of the affected employees,” the letter stated.
“She was also not engaging but rather argumentative and imposing which is detrimental to the objective we are trying to achieve-which is fair and equitable consultation process.”
They pleaded with the acting CEO Bogatsu to fully avail the Head of Group Human Resources and a new Chairperson be appointed to account for the sensitivity and gravity of the matter in future meetings.
Yesterday Bifm met with the executive committee to notify them of the new structure and reveal names of those to be retrenched by end of March.
However, the parent company Botswana Investment Holding Limited (BIHL) released impressive results for the just ended year and employees mention that BIFM even declared a dividend, it is on this tone that they argue that the company is not cash strapped and this exercise is unnecessary.
Bifm Communications & Marketing Manager, Tebogo Keepetsoe, confirmed that the company was currently reviewing its operations and exploring ways to reduce its recurrent expenses.
“This has been a project that has been ongoing for a few months now. The structure at Bifm has been an area of concern for a while now and with a reduction of the assets we have under management we have no choice but to consider our staffing costs,” she said.
She said in an effort to ensure the long term viability of Bifm, there may be retrenchments or redeployments into other subsidiaries of the BIHL Group but avoided confirming the fact that anyone would actually lose their jobs.
Sources had informed this publication of the fund management system used by Bifm from Sanlam that is said to milk the company about P9 million a year while it is inefficient and unnecessary to operate above cheaper ones. Pressed to reveal Bifm’s position regarding this Sanlam system, Keepetsoe stated that the system provides global best practice capabilities and significant efficiencies.
“Beyond that I would say that like everything else we are reviewing all our costs and the costs of this system will be reviewed too.”
Bifm is Botswana’s largest and oldest asset manager with more than 60 percent of Botswana’s assets under its management.