Sierra Leone’s labour ministry called the country’s commercial bank bosses into a room in Freetown and delivered a blunt message: pay workers what the law says they are owed, or expect closer scrutiny. The Ministry of Employment, Labour and Social Security (MELSS) met managing directors and human resource leads from across the banking sector on compliance with labour law, with emphasis on severance entitlements, outsourcing arrangements and workplace safety.
The session came months after Union Trust Bank (UTB) collapsed under a capital shortfall so severe that the central bank had to seize it, and the government stepped in to guarantee severance pay the failing lender could not cover itself. Minister of Employment, Labour and Social Security Mohamed Rahman Swaray held that failure up as the warning banks were there to hear.
Banks Get a Direct Warning From Freetown
The engagement brought together representatives of commercial banks, the Sierra Leone Labour Congress (SLLC), the Sierra Leone Employers’ Federation and MELSS officials. It forms part of the ministry’s broader push to strengthen enforcement while encouraging voluntary compliance with labour legislation across the private sector.
Swaray told the room the ministry had already modernised labour legislation to address current and emerging workplace challenges. Having the right law on the books, he said, was only half the job.
Even with the best legislation, enforcement will always be the real deal.
Swaray said the ministry would intensify enforcement while continuing to press employers toward voluntary compliance. He named the banking sector specifically because of concerns over labour practices, particularly outsourcing and how banks handle severance and end-of-service benefits when employment ends.
The Collapse Behind the Warning
Swaray cited UTB’s recent transition directly, saying the ministry did not want a repeat of circumstances that could hurt workers. UTB was Sierra Leone’s only privately owned indigenous bank, and its failure followed years of falling short of capital rules under the Banking Act, 2019.
The central bank placed UTB under a formal resolution on December 8, 2025, using powers under Section 69 of the Banking Act and Section 5(1)(c) of the Bank of Sierra Leone Act, 2019. Bank of Sierra Leone Governor Dr. Ibrahim L. Stevens said UTB’s paid-up capital had fallen to NLe33.82 million (New Leone, Sierra Leone’s currency), far short of the NLe122 million minimum, with accumulated retained losses of NLe328.52 million dragging the bank into a deeply negative capital position.
The transfer to Rokel Commercial Bank closed on June 16, 2026. Performing assets and customer deposits moved across; non-performing and impaired assets were carved out for separate recovery and wind-down. Every UTB staff member kept a job at Rokel, and the Government of Sierra Leone agreed to fund End of Service Benefits for all of them rather than leave severance to a balance sheet that could not support it.
| Date | Milestone | Detail |
|---|---|---|
| 2019 | Capital rule set | Banking Act, 2019 requires commercial banks to hold at least NLe122 million in paid-up capital |
| December 2025 | Shortfall confirmed | UTB’s paid-up capital measured at NLe33.82 million against NLe328.52 million in retained losses |
| December 8, 2025 | Resolution declared | Bank of Sierra Leone placed UTB into a statutory resolution under Banking Act Section 69 |
| June 16, 2026 | Transfer completed | Performing assets and deposits moved to Rokel Commercial Bank; bad assets held back for wind-down |
| 2026 | Severance funded | Government of Sierra Leone funded End of Service Benefits for every transferred UTB employee |
That last line is the one MELSS does not want to repeat across an entire sector. A government picking up another private lender’s severance bill sets a costly precedent, and officials made clear at the Freetown session that they would rather see banks provision properly now than have the state step in again later.
What Does Sierra Leone’s Labour Law Require of Banks?
Banks operating in Sierra Leone must follow the Employment Act’s rules on termination, severance and end-of-service benefits, alongside separate work-permit rules for any non-citizen staff, and occupational safety standards suited to cash-handling environments. The Freetown session walked bank leaders through all three at once.
Idrissa Dumbuya, the ministry’s Director of Labour and Employment, presented key provisions and ongoing initiatives under the Employment Act and the Work Permit Act, 2023. Swaray separately flagged Section 25 of the Employment Act, which he said provides for severance benefits, and voiced concern that some employers may not be setting aside adequate provisions for workers’ end-of-service entitlements. The Ministry’s Directorate of Occupational Safety and Health addressed workplace safety requirements applicable to bank branches, including the kind of security and cash-handling exposures tellers and guards face daily.
- Termination and severance – end-of-service entitlements under the Employment Act, including the Section 25 provisions Swaray cited directly to bank leaders
- Outsourcing arrangements – whether third-party staffing structures leave agency-hired bank workers with the same protections as direct employees
- Work Permit Act, 2023 – rules governing non-citizen employment, presented alongside the Employment Act by Dumbuya
- Occupational safety and health – workplace requirements specific to branches, security posts and cash-handling roles
The full text of the Employment Act, 2023 sets out these end-of-service and workplace obligations in detail, and it is the document Dumbuya’s presentation was built around. Sierra Leone is not alone in rewriting these rules for modern work arrangements. India pushed through a sweeping overhaul of its labour codes covering gig and startup workers around the same period, part of a wider pattern of governments trying to close gaps that newer employment models expose.
The Workers Who Were Not in the Room
Managing directors and HR leads filled the seats in Freetown. The workers most exposed to the practice Swaray flagged, outsourced staff hired through third-party agencies for roles like security, cleaning and branch support, had no seat at that table at all.
Outsourcing lets banks bring in labour without carrying those workers as direct employees. That can mean a cleaner or security guard working inside a bank branch every day answers, on paper, to a staffing agency rather than the bank itself. When it comes to severance and end-of-service benefits, that structure can blur which employer is actually on the hook.
UTB’s staff were direct employees, which is precisely why the government could step in and fund their severance when the bank could not. An outsourced worker at a different bank facing a similar shock would not necessarily have that same clean line of accountability. That gap is likely why Swaray raised outsourcing in the same breath as severance rather than treating them as separate issues.
Unions and Employers Rarely Agree This Fast
Marx Conteh, Secretary General of the Sierra Leone Labour Congress, described the engagement as important to ensuring banking institutions comply with the Employment Act.
“This is very crucial for government to make sure that banking institutions are in conformity with Part Four of the Employment Act,” Conteh said, commending the ministry and participating banks for taking part.
Ivette Kargbo, Project Officer of the Sierra Leone Employers’ Federation, reaffirmed employers’ commitment to compliance with the country’s labour laws, saying adherence promotes decent work, protects workers’ rights and supports a fair, transparent labour market. She called for continued collaboration between MELSS, the banking sector and employers’ organisations to strengthen compliance and accountability going forward.
Labour and management sitting on the same side of a compliance push is not the default posture everywhere. India saw a rougher version of labour law friction in July 2025, when more than 25 crore workers (roughly 250 million) joined a nationwide Bharat Bandh protest against new labour codes that disrupted banks and public services alongside other sectors.
Enforcement Moves From Warning to Practice
Swaray’s pledge to intensify enforcement was not limited to banks. He said some employers across the private sector may not be making adequate provisions for workers’ end-of-service entitlements, and that voluntary compliance remains the ministry’s preferred route before enforcement action follows.
The Freetown session ended with direct discussions between the ministry and bank representatives on outsourcing, workers’ entitlements and occupational safety and health, the same three pillars Swaray opened with. For commercial banks, the next test is straightforward: whether severance and end-of-service provisions on their books actually match what the Employment Act requires, before the ministry comes back to check.
Frequently Asked Questions
What Happens to Union Trust Bank’s Non-Performing Assets?
They were excluded from the transfer to Rokel Commercial Bank and remain under separate management for recovery and an orderly wind-down, rather than moving onto the acquiring bank’s books.
What Does the Work Permit Act, 2023 Cover?
It sets out permit requirements for non-citizen employees working in Sierra Leone. Idrissa Dumbuya, the ministry’s Director of Labour and Employment, presented its provisions to bank executives alongside the Employment Act during the Freetown session.
Does Sierra Leone’s Labour Law Protect Outsourced Bank Workers?
Employment Act entitlements apply broadly regardless of how a worker is engaged, but Minister Swaray specifically flagged outsourcing as a concern because third-party staffing arrangements can blur which employer is responsible for severance and other benefits.
Who Enforces Labour Compliance in Sierra Leone’s Banking Sector?
MELSS’s Directorate of Labour and Employment and its Directorate of Occupational Safety and Health both took part in the Freetown engagement. Swaray said enforcement activity would intensify alongside efforts to secure voluntary compliance from employers.
