Today, Land Bank of the Philippines (LBP) and United Coconut Planters Bank (UCPB) will officially merge, with the former as the surviving entity.
With the merger, LBP’s assets would rise to approximately P3 trillion and make it the second largest bank in the country in terms of assets after BDO.
In a press release, LBP said the increase in assets will significantly grow “… its loan portfolio directed at servicing the whole agricultural sector, especially coconut farmers, alongside key development industries.”
As in all kinds of corporate combinations, i.e., merger, acquisition and consolidation, the surviving or prevailing company is expected to make some changes in its structure.
It may abolish existing positions to do away with redundancies, integrate overlapping duties and responsibilities, revise business strategies and downsize the workforce.
Rare, if at all, is the status quo maintained in any of those corporate actions.
In a merger, the staff of the absorbed company is often at a higher risk of receiving pink slips when management decides to trim the fat.
Only the best and the brightest of them stand a good chance of holding on to their work or, if that is not feasible, be assigned to other positions that could make use of their expertise.
Either way it goes, for economic and moral reasons, the salaries of the retained employees would have to conform to the compensation policies of the surviving company.
No doubt, many UCPB officers and employees are on needles and pins as they await LBP’s decision on their employment status. They are probably storming the gates of heaven for divine assistance.
Or they are looking for politically influential persons who can intercede on their behalf with LBP to be able to keep their jobs. Bear in mind that LBP is a government-controlled corporation (or part of the bureaucracy) and is therefore susceptible to political maneuverings.
That may not be a matter of concern for UCPB’s top executives who may already have retirement nest eggs to fall back on in case their services are dispensed with.
But not so for middle-level and rank-and-file employees whose salary scale or length of service in UCPB and, most importantly, the demands of family responsibilities do not give them the “luxury” to seek employment elsewhere with equivalent compensation in case LBP decides to shed them off.
More so now, when the country’s economic outlook is quite dim and the unemployment rate is at its highest in recent years due to the pandemic.
The UCPB personnel who do not meet LBP’s criteria on continued employment face the prospect of being asked to resign or to avail of early retirement if their years of service already meet the retirement criteria.
Note that although security of employment is protected by our laws, an employer may terminate the services of an employee by reason of redundancy, i.e., the position that he or she holds is no longer needed or has been abolished.
An employer cannot be compelled to keep an employee if, in its judgment (which should be based on factual reasons), his or her services have ceased to give economic value to the business.
When that happens, the affected employee is entitled to a separation pay equivalent to at least one-month salary or one-month pay for every year of service, whichever is higher.
That minimum payment requirement, however, has to yield to the collective bargaining agreement (in the case of private employers) or collective negotiation agreement (for government offices and government-owned and -controlled corporations) that may be in effect between the parties, or existing company policy that provides for a separation pay higher than that required by law.
And if the employer has the resources to meet that obligation, as in UCPB’s case, there is more compelling moral reason to give the concerned employees the utmost benefits possible for their loss of employment through no fault of their own or for causes beyond their control.
After 59 years, it’s curtains down for the bank created to attend to the financing needs of coconut farmers. Whether or not the merger would produce its desired results remains to be seen. INQFor comments, please send your email to rpalabrica@inquirer.com.ph.