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CRANE BANK GHOST RETURNS TO HAUNT KATAMBA’S DFCU BANK AS COURT BEGINS INQUIRY INTO EX-WORKERS’ PAYMENT CLAIMS

By Mulengera Reporters 

The Kampala High Court has set April 28, 2021 as the date when the hearing of the case in which former employees of Crane Bank sued Dfcu Bank after it acquired the former over the alleged breach of their employment contract and rights when they lost their jobs in January 2017.

In the chamber summons signed by the High Court Registrar, all parties concerned are ordered to attend the hearing before the Judge during which top human rights lawyer Isaac Ssemakadde of Centre for Legal Aid, who is the legal he counsel for the applicants, will seek Dfcu Bank to be ordered to produce and permit the applicants and their advocates to inspect and make copies of the following documents:

  • The purchase of assets and assumption of liabilities agreement between the Bank of Uganda and Dfcu Bank;
  • The list of employees and their respective contracts of employment with Crane Bank and Dfcu Bank;
  • Any and all contracts of the “employees retained by Dfcu Bank that were revised to ensure pay and benefits parity with Dfcu employees;
  • Any and all documents showing that Dfcu Bank did not “underpay former Crane Bank staff for doing the same or broadly similar jobs or jobs of equal value compared to pre-existing employees of Dfcu Bank, including Dfcu’s payroll after acquisition of Crane Bank from January 25, 2017 to October 23, 2017 and the corresponding returns and payment slips for PAYE and NSSF contributions;
  • Any and all documents showing that Dfcu Bank promptly paid “appropriate termination packages (including relocation allowances)” to the applicants;
  • Any and all documents showing that the respondent made an ex gratia payment of Shs1m to all laid off employees;
  • Any and all documents notifying former Crane Bank employees about Dfcu’s “grievance redress mechanism.”

The grounds for the chamber summons are stated in the affidavit of Mr. Mactose Arinaitwe, the fourth applicant who is also a former branch manager at Crane Bank.

In the case, 10 former employees of Crane Bank dragged Dfcu Bank to court on behalf of about 400 other sacked colleagues. The Dfcu Bank is represented by M/s Sebalu & Lule Advocates.

Before the takeover of Crane Bank by Dfcu Bank, the Central Bank had assured them that they would not lose their jobs. However, after Dfcu took over the bank in January 2017, they sacked some of the employees in a disputed restructuring exercise and closed some of the branches.

According to the court documents, the former employees say their sacking contravened the Employment Act (2006). They are now seeking compensation from the bank.

The lead petitioners are: Ms. Therine Kate Achan, Ms. Teddy Akullo, Ms. Janet Mector Angwena, Mr. Mactose Arinaitwe, Mr. Edward Bukenya, Ms. Dianah Loy Kiwumulo, Mr. Abbey Mivule, Mr. Benjamin Muchwa, Mr. Robert Mwanje and Mr. Emmanuel Ngororano.

In her affidavit in support of this case, Ms. Kiwumulo, who was holding the position of Banking Assistant, Compliance Officer, at the time when Crane Bank went under receivership, contends that their respective contracts of service with Crane Bank were on or about January 25, transferred to Dfcu Bank.

She adds that Dfcu Bank was duty-bound to fulfill any and all liabilities and obligations of Crane Bank Ltd vis-à-vis their employment contracts, which was not done.

“The respondent (Dfcu Bank) breached constitutional, statutory and common law duties it owed to the applicants (ex-employees of Crane Bank) and all other members of the represented class as the transferee of their respective employment contracts, thereby causing them loss and injury,” Ms. Kiwumulo said.

Dfcu Bank acquired some of the assets and liabilities of Crane Bank in January 2017. Crane Bank had been taken-over by BoU after its capital had fallen below the minimum requirement set by the regulator.

Dfcu acquired all cash, deposits, loans and advances, furniture and branches. However, the bank did not acquire insider loans, related company loans, any shareholder liabilities and taxes among others.

BoU took over Crane Bank on October 20, 2016 after its capital was eroded to below the stipulated minimum required, placing depositor’s money at risk. BoU said this was due to the bank’s Non-Performing Loans. At the time, Crane Bank was the third largest bank in Uganda.

(For comments on this story, call, text or whatsapp us on 0705579994, 0779411734, 0200900416 or email us at mulengera2040@gmail.com).

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