Indonesia’s Bank Commonwealth will lay off 1,146 employees following its acquisition by Singapore’s OCBC, a deal finalised two months ago for S$182 million, according to The Business Times.

The acquisition, completed through OCBC’s Indonesian subsidiary PT Bank OCBC NISP Tbk, transferred full ownership of the bank to OCBC and integrated over 1.2 million customers into OCBC Indonesia’s network.

The layoffs are scheduled to begin on 1 September, with affected employees receiving severance, service, and separation pay, as well as additional benefits based on their tenure.

Bank Commonwealth, which had a workforce of 1,209 employees last year, is offering those affected the opportunity to seek employment with OCBC NISP as an alternative to termination.

The Indonesian Workers Organisation has raised concerns over the transparency and fairness of the layoff process.

They highlighted issues such as the merging of pension payments with severance packages, which they argue might not comply with Indonesian legal standards.

The union also criticised the severance pay formula for not including a fixed benefit component, which is typically required under local labor laws.

Bank Commonwealth assured that it would adhere to legal requirements in compensating laid-off employees.

An OCBC spokesperson mentioned that the bank is actively engaging with these employees to explore employment opportunities within OCBC NISP, aiming to align these opportunities with their skills and career aspirations.

OCBC NISP has also committed to assisting affected employees in their transition.

The union has appealed to Indonesia’s Ministry of Manpower for intervention, seeking clarity and resolution on the legal issues raised.

Under Indonesian law, employees of an acquired company do not automatically transfer to the acquiring company without mutual agreement, and a lack of agreement can lead to termination.

Featured image credit: Edited from Freepik

The article first appeared on Fintech News Singapore