Big four bank Absa is moving half a desktop support contract in-house, as it seeks to create more efficiencies; raising fears that more IT staff may find themselves unemployed in the next few months.
The bank has informed about 200 Gijima staff members that it will take part of a desktop support contract in-house, and that they will change employers.
Absa recently told about 1 600 staff members within its own IT unit that they had to reapply for their jobs. Almost 200 unsuccessful applicants were escorted off the premises in February and are at home, on the bank's payroll, while they hunt for new jobs through Absa's recruitment centre.
The bank's latest endeavour to cut costs has raised fears among some staff members, with whom ITWeb has spoken, that they may be affected by yet another realignment phase after the contract is taken back in-house.
Trimming costs
Gijima CFO Carlos Ferreira says more than 50% of Absa's desktop services contract with it is being in-sourced, while Gijima will continue to deliver on the rest of the deal.
“Of the 200-plus Gijima employees specifically dedicated to working on the contract, a significant number will go through a section 197 process that will see them transferred to Absa, as permanent employees of the bank,” says Ferreira.
Ferreira says the company has rendered several outsource services to Absa for the past decade and it has delivered in accordance with these deals. He says, because of a confidentially agreement, Gijima cannot share any details.
“Gijima will continue working with Absa and we look forward to tendering for new business with Absa.” Gijima secured the five-year R960 million desktop deal in 2006 and the parties were renegotiating the terms of a renewal, CEO Jonas Bogoshi said earlier this year.
Absa says it is in-sourcing the desktop support services as part of its ongoing drive to improve effectiveness and efficiencies. “Through developments in technology and processes, we continuously seek to improve output while reducing duplication.”
A new boss
An Absa letter to staff, in ITWeb's possession, says the bank is cancelling the services part of a desktop services deal with JSE-listed Gijima at the end of the month.
As a result, Absa will embark on a section 197 process in terms of the Labour Relations Act. The process will require Absa and Gijima to conclude an agreement that includes a document that sets out a comparison of current terms and conditions of Gijima staff with what Absa will provide once the transfer has been completed.
Absa and Gijima will also enter into a variation of the desktop services agreement to “remove the existing service schedule and properly document the scope, services levels, service credits and changes, in respect of the remaining field support services, which terminate on 31 August”.
Solidarity spokesman Marius Croucamp says a section 197 transfer should result in the replacement employment contracts containing similar terms and conditions. He adds that the law specifies that a company cannot transfer staff through a 197 and then go through a restructuring process.
However, says Croucamp, the move can be disruptive and stressful, depending on the circumstances.
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