Bank Negara has no power to approve the proposed retrenchment exercise by Bumiputra-Commerce Finance (BCF), decried the National Union of Banking Employees (NUBE).

The union's general secretary J Solomon said Bank Negara's role as a regulator for the banking industry does not give it the jurisdiction to interfere in the relationship between employers and employees of financial institutions.

"This means Bank Negara has no authority to approve the retrenchment of bank employees," he argued, reacting to a news report quoting chairperson of CIMB-BCB executive committee, Nazir Razak, as saying that the central bank had given the green light to the proposed retrenchment exercise.

The mass retrenchment exercise came in the wake of the merger of two major banks - BCF and Bumiputra-Commerce Bank.

No retrenchment provision

Solomon stressed that BCF is bound by the collective agreement between the Malayan Commercial Banks Association and NUBE, which has no provision for the bank to carry out a mass retrenchment.

"NUBE is seeking an explanation from Bank Negara as to why it had taken such a drastic action, which is unlawful and causes injustice and damages to the livelihood of bank workers and their families."

He added that the central bank's approval is not only "unlawful" but also flew in the face of the assurance it had once given to NUBE that there would be no retrenchment of workers as a result of mergers and acquisitions among banking institutions.

Following the assurance, which was made in the late 1990s, NUBE has extended cooperation during the merger and acquisition exercise by maintaining good industrial harmony in the banking sector as well as the financial well-being of the nation.

He also stated that NUBE had sent a letter dated Sept 21, 2005 to the central bank in regards to the proposed merger between Bumiputra-Commerce Bank and BCF requesting that the merger be to put on hold as there were rumours possible mass retrenchments.

"To date, we have not received any reply from Bank Negara," he added.