A brand development outsourcing company is applying for an urgent interdict against MTN at the Johannesburg Labour Court today, to compel the mobile operator to engage in negotiations to stave off the potential loss of about 2 500 jobs.
The Direct Merchandising Group (DMG), founded in 2002 on the back of being awarded MTN's formal market merchandising contract, wants the court to order the cellular giant to facilitate the transfer of its employees to a new service provider.
In terms of DMG's contract with MTN, the company is responsible for promoting the network operator's brand in rural and informal communities, and thus creates employment for previously-disadvantaged individuals from those communities.
However, DMG's latest contract - a five-year deal - with MTN will lapse on 31 December, and a new contract was recently awarded to an unnamed service provider that successfully tendered for the work.
In its heads of argument, DMG states it wants the Labour Court to order MTN to come to the table and negotiate an agreement, "as envisaged by the provision of section 197 (7) of the Labour Relations Act's 66 of 1995, alternatively to disclose the identity of the party that has been successful in a tender to provide the same service to [MTN] that [DMG] currently [does]".
Section 197 of the Act provides for the preservation of the existing terms and conditions of employment, resulting in the automatic transfer of employees to new employers, under the exact same terms and conditions as before.
In 2007, DMG launched a project with MTN in the Informal market that has since become the operator's well-known "Yello Zone" branding. With this move, DMG expanded its services and employed some 2 500 "Zoners" to drive this initiative.
Update: Judgement was reserved.
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