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Indonesian Commonwealth Bank to Face Mass Layoffs After OCBC Takeover
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Indonesia’s Commonwealth Bank will lay off 1,146 employees following its acquisition by Singapore’s OCBC, a deal it closed two months ago for S$182 million, according to Business times.
The acquisition, completed Through OCBC’s Indonesian subsidiary, PT Bank OCBC NISP Tbk, it transferred full ownership of the bank to OCBC and integrated over 1.2 million customers into the OCBC Indonesia network.
The layoffs are expected to begin September 1, and affected employees will receive severance pay, service pay and severance pay, as well as additional benefits based on their seniority.
Bank Commonwealth, which last year had a workforce of 1,209, is offering affected individuals the option to seek employment with OCBC NISP as an alternative to redundancy.
The Indonesian Workers’ Organization expressed concern about the transparency and fairness of the dismissal process.
They highlighted issues such as the bundling of pension payments with severance packages, which they said may not comply with Indonesian legal standards.
The union also criticized the severance package because it does not include a fixed benefit component, which is usually required by local labor laws.
Commonwealth Bank has pledged to comply with its statutory obligations to compensate furloughed employees.
An OCBC spokesperson said the bank is actively working with these employees to explore employment opportunities within OCBC NISP, with the aim of aligning such opportunities with their skills and career aspirations.
OCBC NISP has also committed to assisting affected employees in their transition.
The union has called for the intervention of the Indonesian Ministry of Labour, seeking clarity and resolution on the legal issues raised.
Under Indonesian law, employees of an acquired company are not automatically transferred to the acquiring company without mutual agreement, and failure to do so may result in dismissal.
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