Bank Audi’s acquisition of the National Bank of Greece (NBG)- Egypt is threatened due to the latter’s failure to meet its employees’ demands, while the long-running deal still awaits the Central Bank of Egypt’s (CBE) approval.
The NBG’s management and employees are in dispute due to two conflicting articles in the Labour Law, namely Articles nine and 122.
The bank’s argument is based on Article nine of the Labour Law which stipulates that “the dissolution, liquidation, closure, or bankruptcy of the establishment shall not prevent fulfilling all the obligations arising according to the law. Merging the establishment with another or devolving it by inheritance, bequeathable, donation, or sale – even by public auction- or by assigning or leasing it or other such disposals shall not terminate the employment contracts of the establishment workers. The successor shall be responsible in coordination with the former employers for implementing all obligations arising from these contracts.”
Meanwhile, the bank’s employees uphold their rights in accordance with Article 122 of the same law which requires an institution that exits from the market to grant employees two-month compensation for each year they spent at work, regardless of whether the employees move to Bank Audi or not.
Article 122 stipulates that “if either party to the contract terminates it without legitimate and adequate justification, he shall compensate the other party for the harm occasioned to him in consequence of such termination. If such unjustified termination is by the employer, the worker shall have the right to resort to the committee referred to in article (71) of the present Law requesting compensation. Such compensation as shall be determined by the committee shall not be less than the wage of two months of the comprehensive wage for each of the years of service.”
The CBE, for its part, stressed that the acquisition deal will not take place unless both parties reach a settlement.
Earlier, CBE’s Legal Advisor Tamer El Dakkak, held a meeting with the bank’s officials and representatives of the employees, but the meeting saw no breakthrough.
Daily News Egypt was informed that the CBE gave the two parties a deadline to reach an agreement before deciding on the sale of NBG-Egypt to Bank Audi.
According to sources involved in the deal, this week may see a radical solution to this problem, if not by the NBG-Egypt, the CBE may intervene to end this dispute, preparing for approving the deal before the end of October.
During last Wednesday and Thursday, intensive meetings were held between representatives of the NBG-Egypt’s employees; Matouk Bassiouny firm, the legal adviser of the NBG-Egypt in the acquisition deal; Hisham Ragab, the legal affairs manager of Bank Audi Egypt; and Baker Mckenzie, the legal representative of Bank Audi in the deal; in the presence of George Sochos, CEO of NBG-Egypt.
According to sources who attended these meetings, the talks resulted in no common ground.
The NBG-Egypt employees argue that Article nine was applied when the Commercial International Bank (CIB) – Egypt’s acquired the Citibank’s retail portfolio, and when the Arab African International Bank acquired the Bank of Nova Scotia.
With regard to Bank Audi’s position on this dispute, Mohamed Bedair, managing director of Bank Audi – Egypt, stressed that the bank is not a party to the dispute between the NBG’s employees and management, regarding their financial rights.
He explained that the CBE did not invite Bank Audi’s officials to attend the negotiations held between the two sides on this matter.
Bedair stressed that the management of Bank Audi is committed to any decision taken by the CBE on the issue, pointing out that when the bank signed the acquisition deal, it pledged to maintain all the bank’s staff.
According to the sources, the dispute between the employees of the NBG and the management of their bank did not only concern the compensation, but also included the NBG’s rejection recognise the annual salary increase of workers, which have not been disbursed for two years. Another concern raised by the sources is the grade and position levels of the NBG-Egypt’s staff.
The sources explained that the terms of the deal guarantee the transfer of employees of the NBG to Bank Audi with the same salaries they receive in the NBG, but employees are concerned about their grade and position levels, especially since their new contracts with Bank Audi shall include a three-month probation before signing long-term contracts.
According to the sources, there is also a big difference between the salaries of the two banks’ staff in the same grade and position level. Bank Audi insisted on the transfer of the NBG’s employees with the same salaries without adjustment, making them paid less than their counterparts in Bank Audi.
Moreover, the NBG’s staff are very upset with the way the bank’s management deals with them. The bank insists not to address them directly, and only to send its requests to the office of Matouk Bassiouny, which has no authority to negotiate on behalf of the staff.
Last week, employees of the NBG launched a social media hashtag, named “Support the rights of NBG’s employees”, aiming to grab the attention of the public opinion to their case.
“When Citibank decided to sell CIB’s retail portfolio, employees were given two-month compensation for each year in service. This was an honourable stance by the bank, and the NBG is supposed to do the same in recognition of the efforts of its staff,” an NBG’s staffer said.
“The issue is solved amicably only, and unfortunately there is no solution offered by the bank, but it delegated the law firm to impose the status quo on us,” he added.
Another employee said, “The idea that as an employee stands before their directors who instead sends a lawyer to negotiate is a problem. They use a threatening tone, which we will not tolerate. We have attended these meetings and it was an unfortunate and humiliating position for the institution, not just for the employees.”
Another employee said, “The NBG’s main headquarters in Greece does not deal with the Egyptian branch professionally, and this is the reason for the problem. The bank’s management was notified several times that the employees’ salaries are low compared to other banks in the local market, however, they did not care about fixing the problem.”
“If the employees had felt that their salaries were in line with their counterparts in the market, they would not demand any financial compensation for the past period,” he concluded.