The stressed staff of Ithala bank is fearing the worst after their August salaries were not paid by the repayment administrator (RA), who is now overseeing the affairs of the historic KwaZulu-Natal financial institution.
The staff fear that since the August salaries were not paid, the RA may not pay them their September salaries when they become due on the 20th of the month.
The frustration comes after last month’s Pietermaritzburg High Court ruling clarified the role of the RA, Johan Kruger, bringing hope that some of the 223,166 of Ithala Bank’s clients could soon access their money, and the staff would be paid on time.
The court confirmed that the RA’s powers are limited only to the preservation and repayment of deposits and do not extend to interference with Ithala’s non-deposit-taking operations.
A month later, uncertainty remains amid confusion about why the salaries have not been paid.
Violation of labour laws
An affected staff member who asked to remain anonymous said it appears that Ithala would be allowed to break the country’s labour laws and default on paying its employees.
“We as staff have not received any payment for the month of August, and seemingly there is no hope so far for the month of September. When an employee breaks the labour law or transgresses any law like the Basic Conditions of Employment Act, the employee will be disciplined, yet when there is transgression from a government entity, there seemingly is a lack of accountability.
“It seems that the office of the MEC for KZN does not see themselves responsible for one of their own. Politics takes precedence over employees’ psychological safety and mental health,” the employee lamented.
Union takes up the matter
The provincial secretary of Nehawu (National Education, Health and Allied Workers’ Union) in the province, Ayanda Zulu, said they are aware of the matter, and they are fighting it on behalf of all the affected employees.
“Yes, we are aware. We have been communicating with the IDFC and Ithala Soc Limited and they are still waiting for the Department of Economic Development and Tourism to give them money. The union will be marching to the Office of the Premier, EDTEA and Treasury on the 18th of September,” Zulu said.
The provincial government had not commented at the time of compiling this report.
The Reserve Bank said the matter is in court, and it could not comment.
“The SARB will not be commenting, as the matter is before the courts and therefore sub judice,” the bank said in a response to the Sunday World.
The bank is currently facing a liquidation battle, which is being heard in court. That was after the Prudential Authority, the division of the South African Reserve Bank which oversees banks in the country, accused it of breaching banking laws and having liquidity challenges.
The national treasury has proposed that a government guarantee of R2-billion will be made available, but the provincial government will have to repay it.
