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Cell C faces off with angry union over retrenchments

Read time 3min 10sec

A showdown is looming between Cell C and the labour union representing thousands of employees who are facing the chop at the struggling mobile carrier.

The Information Communication Technology Union (ICTU), the majority union at Cell C, is demanding the company withdraw retrenchment notices served last week and says the telco’s 2 500 employees are willing to take reduced salary increases.

The telco is insisting retrenchments will proceed as scheduled, as provisioned by the law.

“Cell C is not withdrawing the Section 189 notices issued to employees and will continue with the CCMA-facilitated process,” it says.

The bargaining by the union continues today as Cell C management, shareholders and unions meet to iron out a deal.

Ten days ago, Cell C announced job cuts of up to 40% targeting junior management and semi-skilled staff, saying it was a “difficult decision” to reach.

Last Friday, the ICTU met with the telco’s major shareholder, Blue Label Telecoms, and senior management at Cell C, promising job stoppages until the retrenchments are set aside.

“ICTU made it clear that workers will down tools until Section 189 is withdrawn and it is investors not management that will be the worst losers,” says ICTU media officer Thabang Mothelo.

“Parties agreed that the next urgent meeting, which will only be attended by the executive and ICTU, on the 29 June, will focus on the mechanics of addressing various issues that were raised by ICTU, including the withdrawal of Section 189 letters.”

The back-and-forth bargaining between the employees and employer is amid Cell C’s growing operational challenges.

Cell C is struggling and has been facing operational and liquidity constraints.

In its retrenchment notices served to employees last week, Cell C states it has consistently under-performed and generated incurring R33 billion in losses over the years.

Last year, Cell C posted a R4.2 billion loss and in 2018 losses were R7.3 billion.

“The company is currently facing significant liquidity constraints which have resulted in it defaulting on its obligations to lenders, shareholders and creditors,” reads the notice.

Mothelo tells ITWeb that the employees are cognisant of the company’s depressed financial position but they cannot be blamed for the liquidity challenges.

He says the employees are willing to take a knock on salary increases that had previously been promised to them by Cell C.

According to the ICTU, before the retrenchment plan was announced, Cell C had offered increases of 6% across the board, as opposed to the 8% hike workers wanted.

However, in light of the latest development, Mothelo says employees are willing to take the 6% offered by Cell C, on condition that the retrenchment plan is halted.

“It is the submission of ICTU that acceptance of 6% includes that Cell C will not retrench. ICTU will not accept anything less than withdrawal of the retrenchments,” says Mothelo.

Furthermore, the ICTU is accusing Cell C of double-dealing, saying the telco sought Competition Commission (CompCom) approval of the proposed acquisition of assets by Gatsby SPV, on condition that the deal will save jobs but now it’s retrenching.

Mothelo says: “We will re-look into the recapitalisation process, which had a condition of saving workers from the retrenchment. Cell C will not get what it wants both ways; this is a non-negotiable stance. ICTU’s position is that if Cell C wants to play with fire and lose all, it should insist on retrenchments.”

Last month, the CompCom recommended conditional approval of the proposed acquisition by special purpose vehicle Gatsby.

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