Following the announced completion of the ‘merger’ and takeover of Atlas Mara by Access Bank, some members of staff, especially senior managers of Atlas Mara are expected to be laid off as a top management team is already in place at Access Bank.
A source who asked for their names to be withheld has indicated that massive staff lay off await Atlas Mara staff as Access Bank is known for running a tight ship as far as staff levels and productivity are concerned.
And in a separate interview, the Zambia Institute of Human Resource Management (ZIHRM) has disclosed that following the merger between Access Bank and Atlas Mara, it may be necessary to declare some employees redundant because the new structure resulting from the merger may not be able to accommodate all the employees previously employed by the two separate entities.
On Monday 8th January 2024, Access Bank Zambia Limited announced the completion of the acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia which means that Atlas Mara brand and branches will be taken over and be rebranded to Access Bank.
Speaking in an exclusive interview with the Zambian Business Times –ZBT, ZIHRM president Kelvin Shamizinga explained that the merger will create a new organizational structure, and people will be placed in respective roles accordingly.
Shamizinga said it is basically stated in the agreement of the merger as to who takes over a particular function in the structure. “The merger basically explains the terms that will govern the relationship that exists between these two entities coming together.”
He said if any of the staff that were operating under the HR function for example or any other function within the two initially separate entities will be retained; there will be no redundancies that may arise. He however noted that if there will not be retention of the human capital from both entities, there will be a redundancy that will arise. He said this means they will have to work on the numbers that they wish to return to the establishment. He noted that for a business to run it needs specific roles to be filled and the roles are defined within the organizational structure.
“The merger will create a new organizational structure, and in this new organizational structure there will be people placed in respective roles,” said Shamizinga.
He said after the placement or deployment has happened and there happens to be an excess number of people that will not be placed, the institution will have to make decisions on what to do with those employees.
He noted that there are several options available, the first being to immediately make a decision to declare the people redundant because the business has merged, but the numbers are in excess which the business cannot absorb.
He however noted that redundancy will not just be declared as it is not a simple process. He said there is a need to know in such a case the necessary provisions of the Employment Code Act.
He noted that there is a provision in the Act that speaks to what must be done to declare people redundant.
Shamizinga explained that the Secession of business is one basis on which a redundancy might be in effect.
“In this case, Atlas Mara has ceased to exist and so since it has ceased to exist, the employees in that business can be declared redundant. However, since there is a merger, the terms of the merger define the relationship. So one of the issues I am sure in the terms of the merger must speak to who takes over what position based on what was agreed” said Shamizinga.
The institute president said section 55 of the Employment Code Act guides on how the redundancy is to be put into effect. He explained that when the business ceases or is diminishing or expected to cease, the employees of the organization may have their employment terminated through redundancy. He also mentioned that a redundancy may also occur due to the change of terms and conditions emanating from the merger.
“These changes might either affect their current benefits in an adverse way meaning there is a reduction in their current benefits. Where there is a reduction, then the employer will have terminated that person’s employment through redundancy” said Shamizinga.
He noted that where an employer intends to terminate a person’s employment by reason of redundancy, the employer is expected to ensure that the affected people are given notice of not less than 30 days. He is hopeful that notice of not less than 30 days was given with an opportunity to consult and take measures to minimize the termination and the adverse effects of the merger that is happening.
Shamizinga further noted that there also involves the procedure of notifying an authorized officer not less than 60 days before the termination of the desire to declare some employees redundant and submit to that office information of the reasons for termination.
“In this case, the labor commissioner should have been notified of this action,” said Shamizinga. He explained that section 55 of the Employment Act provides that the labor commissioner must be informed of the intended action so that an assessment can be done. This is to determine that what is about to be done is within the law and the interest of the business.
He said these procedures give the right to a formal process of separating employees if they will not be placed in the new structure. He said this also gives time to outgoing employees to reflect and prepare their minds concerning the impending change.
“The two entities in their planning before the merger should have put in place a plan on how they will redeploy the staff. In that redeployment based on the specific numbers that they were looking at, in this case, their structure and establishment, they should have already known how many people they would return and how many they would separate with” said Shamizinga.
He further added that there is a need to pay the outgoing employees their redundancy packages. He noted that the package is computed in line with section 55 of subsection 3 of the Employment Code Act which provides a basis and the total amount expected to pay as a redundancy package. He said the packages must be paid no later than the last day of employment.
