Kenya Commercial Bank is locked in a dispute with a trade union over an attempt to alter the terms and conditions of its employees.

There has been disquiet at KCB Bank Kenya after the regional lender issued new letters of appointment to 2,500 employees as part of a restructuring plan.

The Banking, Insurance and Finance Union (BIFU), which represents the workers contends the new appointment letters revised the terms and conditions of unionisable employees without its consent.

The letters were to take effect from January but were blocked by the Employment and Labour Relations Court in February.

KCB would not comment, saying the matter is in court, but added that the contracts had been “slightly changed” to align with the new provisions of the Employment Act and emerging HR best practices.

“I have been informed that this matter on the employee issue is still pending before the court of law for determination,” said Judith Sidi, the bank’s director of corporate and regulatory affairs.

Sources told The EastAfrican that the revised letters also affect 1,500 managers after some roles were abolished, rendering some workers redundant. The affected workers are understood to have been required to apply afresh for employment in the company. The successful ones will be retrained and redeployed to new roles.

According to Kenya’s Employment Act, an employment contract can only be altered in consultation with the employee.
“The employer shall, in consultation with the employee, revise the contract to reflect the change and notify the employee of the change in writing,” reads the Act.

BIFU said the rights of its members were violated after the bank unilaterally changed the terms and conditions of employment without involving the union.

“The union was not involved in the negotiations of the new terms and conditions. We were locked out from defending the rights of our members,” a senior union official told The EastAfrican.

Under the reviewed terms and conditions, KCB has abolished overtime payment to staff and introduced a new clause requiring that pay rise for employees be based on performance as opposed to annual  collective bargaining agreement (CBA)  with the union.

A copy of the letter sent to individual employees, however, shows that the CBA will be respected when implementing the changes.

According to copies of correspondence seen by The EastAfrican, KCB  Bank Kenya through their human resources director Paul Russo had written to BIFU on January 14 2016 informing the union of the planned transfer of the banking business, assets, and  liabilities  of Kenya Commercial Bank Ltd to KCB Bank Kenya with effect from January 1 2016.

Mr Russo assured the union that all unionisable employees of Kenya Commercial Bank Ltd would be transferred to KCB Bank Kenya Ltd with their accrued benefits and existing  terms and conditions of employment formalised through a KCB Bank  Kenya Ltd  employment letter.

“… KCB Bank Kenya Ltd has replaced  Kenya Commercial  Bank Ltd as a member of the Kenya Bankers Association (KBA) and fully recognises the current  Collective Bargaining Agreement  in force between Kenya  Bankers Association and Banking, Insurance and Finance Union (Kenya) dated September 25, 2015,” said Mr Russo.

Under the new structure of the bank that was approved by shareholders and regulators, Kenya Commercial Bank Ltd was on January renamed ‘CB Group Ltd and became a non-operating  holding company that owns KCB Bank Kenya Ltd.

KCB Group Ltd has A regional footprint in Uganda, Tanzania, Rwanda, Burundi, South Sudan and a representative office in Ethiopia, with its Kenyan operations driving over 80 per cent of the revenues and profit.

The group’s net profit for the three months to March 31, 2016 increased six per cent to Ksh4.63 billion ($44.79 million) from Ksh4.36 billion ($42.17 million) in the same period last year.

“In our view, the move by KCB  to lock out the union from negotiating the new contracts  was mischievous and intended to  deny the unionisable employees  the constitutional  right of union representation,” said the union official.

According to sources, KCB has acquired consultants from India to upgrade its T24 banking soft to enhance system stability and customer service, which could see the loss of more  jobs in the retail segment.

The bank is abolishing some senior management positions across its departments and creating redundancies.

It is understood that among the departments, so far affected are human resources, audit, corporate and finance.

“The bank is abolishing some positions and then they ask the holders of those posts to re-apply for redeployment only if they pass the interview. This exercise is going on and is affecting all the departments targeting senior managers,” an insider who declined to be quoted told The East African.

By March 31, KCB Group had migrated 59 per cent of its transactions to alternative channels such as agency banking, internet, mobile banking and automated teller machines away from the branches.