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FDH Bank appeals labour case ruling

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FDH Bank has appealed the Industrial Relations Court (IRC) ruling in which the financial institution was ordered to pay compensation and severance benefits to 212 employees it fired in 2016.

The employees were fired on redundancy grounds following the merging of the bank and the then government-owned Malawi Savings Bank (MSB).

According to a notice of appeal which we have seen, the bank is not satisfied with all the eight grounds that led to the conclusion that the bank violated labour laws in the process of retrenching employees.

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The grounds include that the bank was legally obliged to consult the employers before the retrenchment, FDH assured some of the employees that they would not lose their jobs and that the employees are entitled to both redundancy and severance benefits.

Speaking earlier, when he indicated that the bank would appeal, lawyer for the bank Alfred Majamanda said the judgement overlooked some legal principles on redundancy and, generally, evidence on how the retrenchment was carried out.

He added that applicable laws were duly followed when the retrenchment was being carried out.

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“We believe, therefore, that the court erred at law in various respects and the judgement is generally against the weight of evidence that was placed before the court. You may wish to know that there is also a case, whose facts are similar to [those in this] instant, where redundancy was carried out in the same way,” Majamanda said.

In July 2015, the Malawi Government disposed of its majority shareholding in MSB to FDH Financial Holdings, a parent company for FDH Bank, which eventually became the majority shareholder of the bank.

After advice from the regulator of financial institutions and other legal bodies, the financial group of companies merged MSB with its subsidiary FDH Bank, which led to the retrenchment of most MSB employees on redundancy grounds.

Following the retrenchment, 212 employees, led by Justin Chikaonda and Ezekiel Mangani, dragged the bank to IRC and judgement came in their favour.

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