Employees to benefit from Telkom deal

Telkom CEO, Sipho Maseko Picture: Martin Rhodes via Business Day

The fixed-line operator has agreed to limit the proposed outsourcing within its Openserve subsidiary, as well as its consumer and small business and corporate centre departments, to less than 1,000 people. The agreement, with 11,000 employees belonging to trade unions, will also see the introduction of performance-based remuneration for employees.

Telkom has had an adversarial relationship with labour unions for many years, as its organised employees opposed its retrenchments programmes. Since 2013, Telkom had slashed its headcount by 7,500 to 13,700 by the end of March 2016, through retrenchments, the issuing of voluntary severance packages, as well as by outsourcing of some divisions.

This has also resulted in a reduction in employee costs from R9.28bn in March 2013, to R7.91bn at the end of March 2016. But between April and May 2016, a further 1,200 employees left the company, reducing the headcount to 12,500 as of June 1.

CEO Sipho Maseko said on Tuesday the nature of the sector was changing, and the decisions related to employees had to be aligned with the group's financial framework. The relationship with labour unions had improved and there was more co-operation, he said. "We are entering a new chapter in labour relations."

As Telkom looks for new growth opportunities following the completion of its three-year turnaround plan, growth would require "us to be better at attracting and retaining customers", Maseko said.

In recent years, Telkom has focused extensively on improving its customer service, and this will form a major part of employee assessment. The agreement was signed with the South African Communications Union (Sacu) and Solidarity, and is effective from this month. The Communications Workers Union has agreed to the new partnership agreement in principle.

Solidarity deputy general secretary Marius Croucamp believes that the agreement was fair, and hoped that other companies within the telecommunications and technology sector would follow suit. "As a union, we are pleased with the manner in which this year's negotiations have panned out. Our members at Telkom have been faced with various challenges over the past few years, and we hope this agreement will herald a new era of labour relations with Telkom," Croucamp said.

However, Telkom would still finalise the current retrenchment process of about 300 employees, he said.

Sacu president Michael Hare said that to improve the relationship with the group, the union had to change its stance to a more cooperative one. Hare said he was pleased that the moratorium could be extended, as "employees need peace of mind".

Telkom's chief administration officer Ian Russell said that employees would receive a 6% annual increase in April 2017.

Telkom's share price gained 7.69% to close at R70.

Source: Business Day