Labour unions are up in arms and demanding Telkom withdraws the retrenchment letters it issued to 105 staff members on Friday, saying the company already exceeded its target of axing 223 managers during this phase of restructuring.
Trade union Solidarity's spokesperson, Marius Croucamp, says he will be speaking with Telkom CEO Sipho Maseko this morning, as the union tries to understand why the company issued the retrenchment letters.
Telkom previously reported that 302 management-level staff had taken voluntary severance packages and voluntary retirement packages, meaning the company had exceeded its stated target of 223 job cuts. In August, Telkom announced its group-wide restructuring process would proceed, after consensus between it and the labour unions was reached.
The company's need to restructure comes as it seeks to cut costs and streamline its operations. In total, Telkom stated it would seek to cut about 2 500 managers over all three phases of this process.
South African Communications Union (SACU) president Michael Hare says Telkom did not explain how it arrived at the new number of retrenchments, and adds the company was not prepared to withdraw the 105 retrenchments letters, nor is it prepared to discuss the matter further.
"Telkom needs to find these people new jobs - either in their previous positions, or under the new structure. Our first priority is to get these letters of retrenchment withdrawn," says Hare, adding the union is expecting feedback by Friday. Should Telkom fail to respond to SACU's concerns, Hare says the union would approach the Commission for Conciliation, Mediation and Arbitration (CCMA).
The Communication Workers Union (CWU) on Friday reacted harshly to Telkom's retrenchment letters, calling for the letters to be withdrawn and accusing Maseko of nepotism. The CWU alleged that Maseko is employing friends in management positions, while at the same time retrenching the union's members. The union called for Maseko to step down.
In response to these allegations, Jacqui O'Sullivan, managing executive of group communication at Telkom, states: "Telkom's restructuring has been undertaken with a commitment to consult and engage with all our labour representatives, at the appropriate and necessary junctures.
"Telkom has begun feedback discussions with organised labour, including the CWU. These discussions are ongoing and it would not be appropriate to discuss any potential content, prior to the conclusion of those discussions."
Pumping up spend?
Furthermore, unions have also blasted Telkom for unnecessary expenditure, as the Sunday Times yesterday reported the company had spent around R4 million to upgrade the gym at its Pretoria head office.
Despite the company undergoing retrenchments and cutting costs, the newspaper reported it spent around R1 million on five treadmills, six indoor bicycles and numerous kettlebells and dumbbells. Other upgrades and equipment purchases brought the price up to around R4 million, says the report.
Croucamp says while this issue had been discussed earlier with the company, and is not a new development, it is still unnecessary under the circumstances. He adds Solidarity is not exactly happy with the gym upgrade.
Meanwhile, Hare condemned the gym upgrade as "shocking". "This is unnecessary expenditure on a non-core item, it's totally shocking." Hare says the union would engage about this issue with Telkom.
Responding to the unions, Telkom states employee wellness is an intrinsic part of any company's value proposition, adding that "repeated studies have shown the direct correlation between the productivity and engagement levels of active employees versus inactive employees".
"At no time is wellness more important, than when large-scale organisational change is under way. In the face of this difficult change, particularly retrenchments, many tough decisions must be taken," says O'Sullivan.
"At Telkom, we believe an investment in employee wellness is not a frivolous expense but is necessary, for the long-term stability and growth of the company. We remain confident the gym upgrade was both a responsible and reasonable investment in our people."
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