Telkom, major union agree on staff cut plan
Khulu Phasiwe
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Public Policy Correspondent
TELKOM and the Communications Workers Union (CWU) have signed “a headcount management agreement” that enables the fixed-line phone operator to offer enhanced voluntary severance packages to redundant staff.
The agreement, signed on Friday, also puts a one-year moratorium on retrenchments until March next year if a staff cut of 2903 people is achieved in the current financial year.
CWU, which represents nearly 40% of the workforce at Telkom, is the largest trade union at Telkom. Its participation is key to the successful implementation of the voluntary severance packages strategy.
Although the other unions — Solidarity and the South African Communications Union — signed the agreement two weeks ago, Telkom needed the participation of the majority union to ensure a relatively smooth implementation of the strategy.
Telkom’s head-count strategy is aimed at reducing staff costs from the current 22,6% of revenue to about 17%. Last year the company paid R6,7bn in wages and performance bonuses to its employees.
Telkom spokeswoman Lulu Letlape said the cost-cutting measures would include a combination of voluntary severance packages and a reduction of other expenditure related to staff costs.
Letlape said the one-year moratorium could be extended if Telkom succeeded in improving its operational efficiencies.
“The head-count management strategy is a socially responsible mechanism by Telkom to manage down staff numbers as part of its objective to improve business operations in the fast-changing technology environment,” she said.
Letlape said the enhanced severance packages included eight months’ notice pay and a social benefit of R20000, or R10000 as start-up capital for budding entrepreneurs.
“All parties have agreed to establish a joint national committee to monitor the implementation and set time frames for the voluntary process,” she said.
Telkom group executive for human resources Oupa Magashula said employees who left the company by the end of next month would qualify for a gain-sharing bonuses, which are traditionally paid in July.
Magashula said the “mutually beneficial relationship” between the unions and management had resulted in the signing of the strategy.
“We have come a long way with our social partners to reach a stage where we have now signed an agreement which effectively brings stability and certainty in our business, with no cloud of possible retrenchments hanging over employees’ heads,” he said.
Magashula said the company had the prerogative to approve or decline applications for voluntary separation packages based on its operational needs.
Telkom said a large number of the job losses would be driven by natural attrition, which currently stands at 4,5%.
The company said employees whose jobs became redundant would have a choice of going into its internally run Agency for Career Opportunities for up to 10 months with full pay and benefits, with a view to being reskilled or redeployed within Telkom or any of its partners in the technology sector.
Last year the unions criticised Telkom’s offer of enhanced voluntary severance packages.
“Packages, whether they are voluntary or not, mean that jobs have been lost to the economy, something that SA cannot afford.”
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