The Bangladesh Bank has sought an explanation from HSBC Bangladesh after dismissed employees alleged that the lender unlawfully terminated 257 officials in the name of shutting down its retail banking operations without complying with the applicable conditions and service standards.
The central bank sent a letter to HSBC earlier this month, asking the lender to clarify whether it had properly complied with the conditions imposed by the Bangladesh Bank while providing financial benefits to employees affected by the closure of its retail banking branches in Gulshan, Dhanmondi and Chattogram's GEC Circle.
According to the letter, HSBC has been asked to submit a detailed explanation within 14 working days on whether the compensation package offered to the dismissed employees complied with the conditions set by the regulator.
In petitions submitted to the central bank, affected employees alleged that HSBC had violated Bangladesh Bank's conditions in determining the compensation package. They claimed that the package was substantially lower than both HSBC's global standards and the benefits provided to employees laid off in previous restructuring exercises in Bangladesh.
The Bangladesh Bank has sought explanations and documentary evidence from the bank on three issues: a comparative account of the previous and current compensation packages; the reasons for requiring employees to sign a mandatory "Declaration of Release & Discharge," under which they waived legal claims; and whether all other conditions imposed by the regulator while approving the closure of the three branches had been duly implemented.
Employees who lost their jobs in the retail banking division on 4 July said they had received compensation equivalent to a maximum of 15 months' salary. They argued that employees in other countries had received significantly larger severance packages.
According to the dismissed officials, HSBC paid compensation equivalent to 120 months' salary in India, while employees in Sri Lanka received compensation worth 84 months' salary during a similar restructuring process. They alleged that the compensation offered in Bangladesh was discriminatory by comparison.
The employees further alleged that HSBC had provided one set of information to the Bangladesh Bank and another to staff members, thereby depriving them of their legal rights and entitled benefits by failing to follow labour laws governing retrenchment.
Bangladesh Bank / HSBC
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