Bank of Baroda’s ‘one-sided’ contract riles Dena Bank, Vijaya Bank staff

With the merger of Dena Bank and Vijaya Bank with Bank of Baroda (BoB) coming into effect from April 1, the BoB management is reportedly forcing staff of the other two banks to sign an allegedly “one-sided” and “discriminatory” contract before March 16. Even as final negotiations regarding the wages are on, Dena Bank and Vijaya Bank employees have received a letter from BoB, asking them to sign the offer of employment or to opt for the Voluntary Retirement Scheme (VRS).

While the letter asked employees of both the banks to exercise either of the options before March 16, it did not specify the terms and conditions of employment. This would be decided later by the Board of Bank of Baroda, according to the letter. “You are hereby offered to hold office and service in Bank of Baroda, from the effective date i.e., April 1, 2019, on the terms and conditions as may be decided by the Board of Directors of Bank of Baroda,” said the offer letter, a copy of which is accessed by this publication.

The staff of both Dena Bank and Vijaya Bank called this “discriminatory”. “We were told that our interests will be protected, but the BoB is using indirect methods to force VRS on us. We cannot be forced into signing the consent letter without knowing the terms and conditions. As per the initial negotiation, our wages and promotional terms and conditions will not be at par with (that of) Bank of Baroda (staff), which is discriminatory,” a Vijaya Bank employee said told this paper. 

The employees are also bothered by the transfer policy. “There are many branches of Dena Bank and Bank of Baroda, which are overlapping. While the amalgamation process is still on, the staff fears mass transfer of Dena Bank employees. So, this is like blackmailing us into either working on unsaid terms and conditions or taking VRS,” said a Dena Bank employee.

Meanwhile, the banks’ union has already termed the whole process illegal. “The whole process of amalgamation is illegal, unethical and done in a hasty manner. There was no need for opting for Alternative Mechanism. And while the petition is already in the Supreme Court, they are forcing this contract on employees, just to show that employees are agreeing to the merger,” S Nagarajan, general secretary, All India Bank Officers’ Association said.

The All India Vijaya Bank Officers’ Union has said that the manner in which the merger is done is highly questionable. “This is totally pressure tactics and a highly questionable move. While those who are about to retire may opt for VRS, many young employees will go ahead and sign it to save their future jobs,” said K Srinivasarao, general secretary, All India Vijaya Bank Officers’ Union. The queries sent to Bank of Baroda by this correspondent remained unanswered.

A case in point

When merger of SBI came into effect, 4,000 employees at SBI and associates opted for VRS Till date, there is a difference in pay, perks and promotion policy that associate banks’ employees feel they are getting a step-motherly treatment, even in HR policy In July last year, 70,000 officers of the associate banks were asked to “return the compensation for extra work” during demonetisation

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Will employees of three banks get VRS option as part of merger deal?

Voluntary retirement may become a way of life for many as part of the proposed merger scheme between three state-owned banks -- Bank of Baroda, Dena Bank and Vijaya Bank.

Although Union finance minister Arun Jaitley promised that employees of these banks will be protected, but banking experts said there would be areas of overlaps and flabs post-merger which the new management of the amalgamated bank would need to look into.

“Given the larger presence of BoB and Dena Bank in Gujarat, there would be overlap of branches and ATMs, so there could be gains from rationalization,” said Lalitabh Shrivastawa, an analyst with Sharekhan by BNP Paribas.

If the merger of State Bank of India and its associates is any precedence, then voluntary retirement scheme is most likely to be the part of the amalgamation process. About 4,000 employees at SBI and associate banks had opted for VRS. Bank of Baroda, Dena Bank and Vijaya Bank have about 85,600 employees between them.

We don't think the merged entity comes off terribly worse off, at least on paper, though a smooth three-way merger is always a tall ask,” said Jefferies India in its research note on bank.

The government said a scheme of amalgamation will be formed and laid before the Parliament. While it will be interesting to see whether VRS becomes a reality, but senior employees of the merging banks have started anticipating such a prospect.

“The situation in today’s banking is vicious. No one’s willing to take any business decision in fear of going wrong and getting punished. I would be happy to take VRS if it comes my way,” a banker in his mid-50s with Bank of Baroda told ET, requesting anonymity.

The proposed merger has created a psychological divide between seniors and juniors as well: while younger employees see the possibility of working in bigger bank as a better career opportunity, seniors have become somewhat apprehensive.The government on Monday said that employees would be protected and they would get the best package prevailed among the three banks.

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