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Former Crane bank staff to sue dfcu bank

In the coming days, a legal showdown looms after the High court gave former workers of Crane bank green light to sue dfcu bank over what they term as unlawful termination of employment.

The High court’s decision came after 10 former employees asked court to allow them file a representative suit on behalf of more than 300 of their colleagues who lost their jobs following the takeover of Crane bank by dfcu early this year.

Isaac Kimaze Ssemakadde, the lawyer representing the former Crane bank staff, said this would be a protracted legal battle.

“We are going to leave nothing unturned to ensure that these people get the justice they deserve,” Ssemakadde said shortly after the ruling. “In a matter of days, we shall be filing a suit against dfcu to assert the rights of employees.”     

In the case which was heard ex parte (without dfcu lawyers), Ssemakadde contended that all other members of the represented class have the same interest in the intended suit because their respective contracts of service with Crane Bank Limited were in January this year transferred to dfcu bank.  

Consequently, Ssemakadde argued that dfcu is duty-bound to fulfill any liabilities and obligations of Crane bank vis a vis the applicants and each member of the represented class.

The ten former employees of Crane bank, who were cleared to represent others, are:  Catherine Kate Achan, Teddy Akullo, Janet Mector Angwena, Mactose Arinaitwe, Edward Bukenya, Dianah Loy Kiwumulo, Abbey Mivule, Benjamin Muchwa, Robert Mwanje and Emmanuel Ngororan.

The applicants complain that dfcu breached their employment contract and also breached their rights when they lost their jobs after the said bank took over Crane bank.

Before the takeover, Bank of Uganda, which arranged the sale of the bank to dfcu, assured the 700 employees of Crane bank that they would not lose their jobs. However, after dfcu took over the bank in January, they sacked some of the employees in a restructuring exercise and closed some of the branches.

Contacted yesterday, Agnes Isharaza Tibayeita, dfcu’s legal officer, said she couldn’t comment about the court proceedings since they haven’t been called to take part in the same.

“We hear stories in newspapers,” Tibayeita said. “We shall give our position if we are served.”  

At the end of last year, Bank of Uganda took over Crane bank after its capital had fallen below the minimum requirement set by the regulator. In January, dfcu acquired all cash, deposits, loans and advances, furniture and some branches of Crane bank.

However, dfcu did not acquire insider loans, related company loans, any shareholder liabilities and taxes, among others.

Currently, Bank of Uganda and Sudhir Ruparelia, the former owner of Crane bank, are embroiled in a fight over the treatment of the defunct Crane bank’s non-performing loans worth Shs 600bn.


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