Image Credit: Karen Dias, XPRESS

Dubai:  At 28, Indian bank executive Monica Ashok Chugh had achieved what many girls her age dream of - quality western education, a well-paying job and fat year-end bonuses.

However, on October 28, 2009, it all came crashing down when she was made redundant by HSBC, her employer for three years.

Worse, the bank linked her to an alleged internal fraud case.

Psychologically tortured by the probe, in addition to being in debt of nearly a quarter of a million and a fruitless job hunt, Chugh was close to cracking up. "It was the biggest shock of my life," she said, recalling the tense meeting she had with senior managers who demanded immediate handover of her company-supplied laptop and Blackberry that night.

"I had no clue that something like this was coming, which would change my life completely," she added.

The London-based HSBC Bank, which is also Europe's largest, had reportedly fired as many as 80 employees in the UAE and more than 1,100 worldwide, according to topnews network website: http://topnews.ae, in the midst of the global downturn.

Chugh was informed via a letter that November 27, 2009 would be her termination date and that she would get Dh34,500 in redundancy pay, plus Dh20,701 in end-of-service benefits - but only after the internal probe into the alleged fraud was completed.

Humiliating exit

That evening she was told to put her personal items into a box, which, to her humiliation, was checked before she was to take them home. A bank fraud and risk staff saw her off empty-handed at 7.30pm to a cab.

As days of agony turned to weeks, whatever cash she had on her was slowly wiped out. With no money and unable to land new job interviews, even after sending out more CVs (curriculum vitaes) to more than 120 places, Chugh's woes were only set to worsen. To get by, she had to sell off her jewellery for more than Dh11,000 in November. Today, Chugh does not have money to even pay her house rent.

Before that fateful day in October, her life had seemed almost perfect. Armed with a degree in Hospitality and Human Resources Management from the prestigious Hotel Institute Montreux in Switzerland, she had started off as an administrative officer at HSBC Bank in 2006.

In three years, she had worked her way up to become support manager for HSBC'S business banking department, drawing a monthly pay of Dh11,500.

Under the bank's performance rating system, she was ranked "2" from 2007 and 2008, the second-highest grade, with no record of warning letters or disciplinary action against her name.

Her bonuses averaged Dh50,000 per year from 2007 to 2008 - a fact that emboldened her to avail a Dh200,000 loan from the bank - partly to help her father's failing construction business in India, she stated. "The bank used to give up to Dh250,000 in personal loans to any employee, regardless of status or capacity to pay, so I took it," she said.

For three years, her unit bagged the bank's platinum award - which explains the huge bonuses for its staff, she said.

"If I had the money, I will definitely pay my debts. Such bonuses would have made it easy for me to pay them off."

Chugh has racked up Dh30,000 of debt on her three credit cards, which she hopes will be covered by a credit shield. "When you get a good salary, your spending confidence also goes up," she said, defending her apparent lack of fiscal prudence.

On November 18, Chugh received a month's basic salary in lieu of her notice period and was instructed to have her visa cancelled. On November 30, the bank instructed her to attend a meeting in 10 days for a chance to explain her side of the story.

On December 9, the bank rejected Chugh's request for Dh10,000 to be credited to her account out of her redundancy pay, citing the on-going investigation. "I'd been mentally tortured for two months and I'm broke. My name has been ruined in the banking community," said Chugh.

On December 10, during the disciplinary meeting with two bank officers, Chugh was told about her infractions: presenting manipulative documents to senior managers, breach of the bank's code of conduct and failure to report a malpractice.

Chugh insisted she had nothing to say about the unclear, even wrong, allegations. "I am just a support staff, had no approving authority and was not in touch with customers," she said.

‘Unclear' allegations

"Without letting me know what the subject of discussion is all about, what can I speak of?," she asked. The meeting concluded with a note that she was not cooperating with the bank.

On December 17, she said, the bank confirmed her termination in a letter and the forfeiture of her redundancy package - outlining [in the letter] the fact that the bank "had reasons to believe she was aware of and involved in the malpractice". On December 20 the bank denied her request for a one-month visa extension.

When XPRESS contacted HSBC, they said that they did not comment on individual cases, but issued a general statement (see box) on the issues raised.

Pushed to a corner Chugh decided to fight back. On December 22, she went to the Ministry of Labour in Dubai, where she discovered that two other ex-colleagues had also filed a similar complaint. On December 24, the bank informed Chugh that, following an independent review, her termination on the grounds of misconduct has been reversed, and that she will get her entitlements in full. Her work permit was extended up to January 31, 2010 - but the decision to make her redundant stands.

On January 6, Chugh said a Ministry of Labour official advised her to pay back the loan in full. "I'm broke," she said. "My security cheque is with them [bank] which they can use to put me behind bars," she added.

HSBC response

A statement from HSBC said: "With any redundancy, HSBC always complies with UAE Labour Laws." The bank does not ban redundant staff and gives all redundant staff three months before visa cancellation, it added. "Any staff loans will have been converted to customer loans, and HSBC works with all its customers to give them every assistance in paying off their obligations. This instance is no different."

The bank also refuted charges of discrimination."We take the allegations of racial discrimination extremely seriously, and absolutely refute them in this instance."

Legal opinion

The dilemma of Monica Ashok Chugh and people caught in similar circumstances is a difficult one, lawyers told XPRESS.

Lawyer Mohammad R. Al Suwaidi, Managing Partner and founder of Dubai-based Al Suwaidi & Co., said the termination of employment and unpaid personal loans are two separate issues.

"Under an unlimited job contract, either the employee or employer can legally terminate the employment agreement with one-month notice," said Al Suwaidi. But it becomes complicated, said Al Suwaidi, when an employer lends a huge amount to employees who were terminated before the loan is paid in full.

Security cheque

"If the employer deposits the security cheque (given by the borrower as a guarantee), then it becomes a bouncing cheque case."

As a result, Chugh and her colleagues could face jail in the UAE. "This is a defect in the law, I would say, which criminalises bouncing cheques," said Al Suwaidi. "Creditors can take advantage of this system and use security cheques to ‘blackmail' people or customers. But this is wrong, because the creditors should evaluate the borrower's ability to pay before giving him the money. Creditors must take some of the risk.

He said: "In the past, the late Shaikh Zayed Bin Sultan Al Nahyan had issued instructions that a bank should not be able to jail people for unpaid loans if they did not take proper precautions to check on the credit-worthiness of the borrower or conducted proper background checks. A lot of cases lodged by creditors were rejected on the basis of this. But it was just an instruction - not a law. Now, I wish the current government would do the same thing, so lenders will be forced to do their due diligence. The best way to do this is by cancelling jail terms related to cheques.

"They can still enforce collection by taking collateral, or guarantees, or a property on mortgage - or reschedule the loan."

At the moment, he said, nothing concrete or proposed would change the situation for people like Chugh.

Another lawyer, who asked not to be named, offered the hard view of Chugh's case: "You don't honour a cheque by maintaining a job. The borrower has benefited from the money given by the creditor, so it has to be paid. Employment is no guarantee, while a signed cheque is a guarantee," he said.

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