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Minister says post office survival ‘critical’ as job cuts loom

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 28 Nov 2023
Mondli Gungubele, minister in the Department of Communications and Digital Technologies.
Mondli Gungubele, minister in the Department of Communications and Digital Technologies.

The South African Post Office’s (SAPO’s) shareholder wants to see the protection of as many jobs as possible, as the ailing entity undergoes retrenchments as part of a business rescue plan.

Minister Mondli Gungubele in the Department of Communications and Digital Technologies (DCDT) is the SAPO shareholder on behalf of the state.

Last week, the SAPO business rescue practitioners published the business rescue plan for thebankrupt state-owned enterprise, proposing a headcount reduction of 6 000 employees in terms of Section 189 of the Labour Relations Act (LRA).

Section 189 of the LRA permits employers to dismiss employees for operational requirements, according to lawyers, who say there are defined requirements in terms of the Act, such as economic, technological, structural or similar needs.

According to the business rescue practitioners, SAPO’s inadequate investment in technology is one of the biggest reasons for its downfall.

The state-owned entity is in dire financial straits, with liabilities totalling approximately R12.5 billion as at 31 July. It is also faced with a waning branch network due to lack of rent payment to landlords, IT issues and forced manual operations because of outstanding electricity bills.

Despite these issues, government has remained resolute in saving the post office instead of doing away with it.

In a statement, the DCDT says it’s confident the business rescue route is the best viable option to ensure the post office’s turnaround into a functional entity that competes as an equal player in the digital era.

In terms of the proposed Section 189 process in the business rescue plan, the department urges the practitioners “to protect as many jobs as possible”.

It also emphasises that any application of a Section 189 process must be in line with the “Post Office of Tomorrow” strategy, which proposes an employee-owner-driven scheme that has the potential to empower the worker and create future job opportunities.

“There is acknowledgement that strategic partnerships will have to be formed in order to enhance the growth and functionality of SAPO. The business rescue practitioners have received proposals from various entities and these will be considered after the adoption of the plan,” according to the department.

Says Gungubele: “We must reiterate that government has no intentions to privatise the SAPO, but rather identify strategic opportunities and partnerships in order to revitalise the business.

“SAPO must still ensure universal postal services as it remains the only footprint for a government and citizen services platform in some areas, particularly in rural communities. The existence of SAPO is critical for the global postal network, as SAPO is still regarded as a regional hub for mail and parcel.”

The department says it’s encouraged that the plan redefines the relationship between SAPO and the PostBank, in terms of the move towards establishing the PostBank as a commercial state-owned bank.

“We are also excited that the SAPO Amendment Bill is now being processed in Parliament. This Bill is very critical in the realisation of some of the key elements of the business rescue plan. As government, we remain committed to saving the South African Post Office,” concludes Gungubele.

To access the draft SAPO business rescue plan, click here