Sixty members of staff and two executive directors at Citizen Insurance Company — whose closure by the Reserve Bank of Malawi is under judicial contest — have challenged the central bank to continue paying their salaries until the fate of the company is concluded in the courts.
In a letter date July 2, 2012 and addressed to the Registrar of Finance Institutions (who is Governor of Reserve Bank of Malawi), the workers say since the court has not taken action to wind up the company, staff are still employees of the company and should be paid their salaries by RBM which took over operations of the company in August 2011.
However, the RBM says it obtained a stay order on the ruling of the Commercial Court which overturned the winding up of the company and that until the court rules otherwise, the company remains closed and staff contracts terminated at Citizen Insurance Company.
A representative of the staff at Citizen Insurance Company Yotam Jere told The Daily Times in an interview that should RBM insist on not paying their salaries (dating back to November 2011), they will institute contempt of court charges against the central bank.
“Justice [Andrew] Chikopa ruled that salaries for members of staff should be paid from November 2011,” said Jere, adding: “The appeal and stay order [obtained by RBM] does not say anything about the salaries which staff are entitled to.”
He explained that following RBM’s takeover of the company in August 2011, RBM sent them on paid leave and honoured their salaries until November 2011 when it terminated their contracts without notice at the time operations of the company were being wound up.
He said the aggrieved employees teamed up with executive directors and challenged the RBM action to wind up the company through the Commercial Court which overturned RBM’s decision in favour Citizen Insurance and employees on grounds of prematurity, lack of facts and bad accounting principles used.
He said following the Commercial Court’s ruling, the company was deemed to still exist and members of staff still remained on payroll — the status which he said still remains so to date.
Jere said the employees are living in misery without salaries and that some of them are still posted in remote areas such as Karonga, Songwe, Mwanza and Zomba as RBM did not provide resources for their repatriation back to their homes when operations of the company were stopped.
On their part, one of the executive directors at Citizen Insurance Erick Chihana said he and Managing Director Kenanson Nyirenda have not been paid salaries and benefits since RBM took over the company in August 2011.
He said, however, that the RBM has continued denying them remuneration despite a ruling by High Court Judge Joseph Manyungwa of October 6, 2011 which ordered RBM to pay their salaries and benefits pending judicial review on the matter.
The executive directors have since filed contempt of court charges against RBM on the matter.
In an interview on Thursday, RBM spokesperson Ralph Tseka said the stay order obtained by the bank on the earlier court ruling means Citizen Insurance remains closed and employees’ contracts terminated.
“Until a ruling on our appeal is made by the courts, the status quo at the company remains as it was before the ruling at the [Commercial] Court,” said Tseka.
