London - ImpACT International for Human Rights Policies is greatly concerned by Lebanese banks laying-off of thousands of employees. This follows the severe and accumulating crises they suffer, which have led to the closure of dozens of bank branches.
The London-based think tank said that any restructuring of the Lebanese banking system should not take place at the expense of thousands of employees by sacking them from their jobs without providing them with their full rights.
The majority of layoffs were coercive and marred by a violation of rights, including the non-disbursement of end-of-service benefits
Statistics compiled by ImpACT showed that the number of banking branches in Lebanon decreased by about 15% from 1,081 at the end of 2018 to 919 by the end of 2021.
According to the statistics, the number of employees in Lebanese banks decreased in the same period by 23% from 25,908 employees to about 20,000.
Testimonies received by ImpACT showed that the majority of layoffs were coercive and marred by a violation of rights, including the non-disbursement of end-of-service benefits. Their redundancy pay must be provided in full.
ImpACT highlighted that the mass layoffs may have violated Lebanese employment law, international conventions, and agreements related to workers' rights.
Paragraph (f) of Article 50 of the Lebanese Labour Law stipulates that “If the employer wishes to terminate employment agreements due to exceptional factors, the said employer should inform the Ministry of Labor one month prior to termination” to put a final program that takes into account seniority, age, specialization, and familial and social status.
ImpACT International also stressed the need to fully comply with the text of the aforementioned paragraph, as this has a direct impact on both the future of families affected by the mass layoffs, as well as on social security.
Banks in Lebanon suffer from an accumulating crisis, in light of the worst economic collapse in Lebanon since 1850, as ranked by the World Bank. This prompted banks to impose severe restrictions on dollar withdrawals and prevent wire transfers abroad.
This made depositors unable to use their money, especially in dollars, while deposits in the local Lebanese pound lost their value as the currency collapsed in the black market.
The Association of Banks in Lebanon used this situation as an excuse to start downsizing to adapt to the new economic conditions. The association considers that "in light of the continued reluctance to find solutions for the financial issues, a new reality has been imposed on the economy, institutions, and citizens."
It is common knowledge that most of the banks' revenues were due to the benefits they received from the state and the Central Bank. The Central Bank is facing criticism for the monetary policies adopted for decades, which is allegedly the reason for accumulated government debt.
Restructuring the banking sector is one of the main reform items in a country that ranked second in the Middle East and North Africa in 2019 in terms of the number of bank branches per 100,000 people, according to the World Bank.
Amid the depositors’ fear of deductions from their deposits, the Lebanese government estimated financial losses of $69 billion, without officially announcing how the losses are distributed among the state, the Central Bank, and other banks.
ImpACT confirmed that the Central Bank of Lebanon’s plan on the reorganization of banks must ensure that jobs are protected and employees' rights are met as a priority, with effective interventions to help rebuild the banking system and restore confidence in economic institutions.
ImpACT International for Human Rights Policies urges the Lebanese government to particularly focus on implementing reforms in the banking sector, supporting specialized banks that are concerned with creating a productive economy, as well as increasing guarantees on bank deposits.