Although former Telkom COO Molatsi Nzeku has won his case against the fixed-line operator for unfair dismissal, with a ruling that he be reinstated in his previous role, it is highly unlikely there will be a future for him at the company, say analysts.
Yesterday, it was announced that Nzeku, through private arbitration, had been successful in his unfair dismissal dispute against Telkom. The arbitrator also awarded in favour of Nzeku's reinstatement to the company.
In February last year, Telkom announced it would axe its COO on claims that he had opposed the operator's restructuring to the point where his role had become extremely divisive and counterproductive. The telco said it had indications his actions had resulted in reputational damage.
At the time, Nzeku vowed to take action against Telkom, adamant that he was not guilty of the allegations.
Nzeku could not be reached to discuss the outcome of the arbitration; however, several media reports suggest he has refused to comment, saying only that his legal team is in talks with Telkom.
The fixed-line operator says: “Telkom was notified of the outcome of private arbitration between Telkom and its former chief of operations, Mr Motlatsi Nzeku. The arbitrator has awarded in favour of Mr Nzeku's reinstatement to Telkom. Telkom will study details of the award and discuss it with its external legal advisors in respect of the way forward. The company is not in a position to make any further comment at this stage.”
Meanwhile, Telkom's management restructuring process, which is the crux of the dispute, has been concluded and the role of COO has been scrapped. The situation, as it stands, casts doubt as to what position, if any, Nzeku will take up at Telkom.
Black sheep
Faan Coetzee, director at legal firm Hofmeyr, specialising in employment and labour law, explains that if the ruling from a private arbitration process finds in favour of unfair dismissal and the arbitrator rules that the employee to be reinstated, then the employer is obligated to do so.
In this case, it would include either a retrenchment package offer or offering the employee alternative positions, with similar roles and responsibilities.
Coetzee notes that at anytime, post-ruling, the parties can agree to a settlement offer and agree to sever the relationship amicably.
Independent telecommunications analyst Richard Hurst argues that the nature of the situation would make it difficult for Nzeku to try and fit in at Telkom again. “It would be a case of a square peg in a round hole,” he says.
He argues, however, that despite the absence of the role of COO, incoming Telkom Mobile may provide a position tailored to Nzeku's calibre.
The company is also currently without a permanent CEO, with Jeffery Hedberg taking the reins in acting capacity.
WWW Strategy MD Steven Ambrose says it is also highly unlikely, but not inconceivable that Nzeku becomes a candidate for CEO.
Governance issues
Both analysts agree that it is a “wait-and-see” situation, but argue that the entire issue casts a spotlight on Telkom's corporate governance practice.
Ambrose also argues that the main issue is that Telkom is a parastatal and, despite being nominally run as an independent company, there is far too much political interference, and intervention, in the operations of the company.
The telecommunications space is far too dynamic and fluid to tolerate with the current style of management and operations, opines Ambrose.
“Telkom must, if it wants to thrive and compete, become a nimble, lean, and effective operation, and the only way this would happen is for full privatisation to take place.
“Competition will intensify, and Telkom runs the risk of becoming less and less relevant in the future.
“Privatisation is not exactly high on the government's agenda, and as such I do not expect much to change going forward regarding the operation and governance of Telkom,” concludes Ambrose.
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