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MTN scores Labour Court victory, stores to be offloaded

Read time 4min 10sec

The Johannesburg Labour Court has dismissed an urgent application by the Communication Workers Union (CWU) to halt possible job cuts at MTN, ruling the labour union had failed dismally to cross the first hurdle for an interim interdict.

The union lodged the interdict in May in a bid to prevent MTN from proceeding with a transformation project, which will see the telco selling off some of its branded stores.

The CWU wanted the court to compel MTN to engage with the union via provisions in the Labour Relations Act (LRA) and “disclose full information” to enable the union to consult with affected members.

MTN’s plan has been received with scepticism by employees who fear their jobs may be on the line, affecting thousands.

The CWU has labelled MTN’s plan to sell its stores as “embarrassing transformation broad-based black economic empowerment” that seeks to avoid converting casual workers to permanent positions.

The union, which represents a significant number of workers in the telecommunications space, says MTN has not been forthcoming with full details.

On Monday, judge Connie Prinsloo dismissed the case with costs, saying: “The application was wholly misguided and meritless, and the applicant dismally failed to satisfy the requirement for the interdict it was seeking and to place facts before this court to support its case.

“If the aim is to protect employees in a section 197 of LRA transfer, this application was certainly not the way to achieve it.”

Reacting to the judgement, CWU secretary-general Aubrey Tshabalala says: “I have lost confidence in our judiciary.

“We think the court erred. The judgement says a company does not need to consult on transfer or to sell a business. Furthermore, MTN wants to undermine section 197 of the LRA by transferring workers with less benefits and the court sees no wrong with it,” he says.

The court also lambasted the union, saying its “reading of section 197(6) of the LRA in isolation and as basis for this urgent application is opportunistic and ill-advised, and indicative of lack of understanding of the provisions of section 197 of the LRA”.

Tshabalala denies this. “The court acknowledges our recognition and that CWU is the majority union, and the agreement says the union will represent all workers in the bargaining unity, including casual workers, on labour matters, but the court says that’s not specific in section 197 of the LRA.”

In court, MTN argued that section 197 of the LRA “does not envisage any consultation and the applicant (CWU) does not have a right to consultation under section 197”.

It argued: “The decision to sell part of the business is a commercial one and does not require any consensus-seeking exercise or agreement with the applicant.”

The judge agreed with MTN, saying: “MTN made it clear that there is no agreement and there is no intention to enter into any agreement, which was not disputed by the applicant. That being the case, that means the provisions of section 197(6) do not find applications.”

Last year, ITWeb reported that the mobile operator’s employees had expressed fears that the move to sell off MTN stores (Branded Channel) will result in them losing their jobs.

The employees also claimed MTN’s plan was to “dupe them into joblessness without proper consultations” with the workers at these facilities.

When contacted for comment at that time, MTN denied the retrenchment accusation but confirmed there are plans to sell off stores, and said employees will be transferred over to new employers with their current total cost to company packages, for a minimum period of 12 months.

“It’s unfortunate that this exciting project, that is seeking to achieve some important MTN and national objectives, has been either misunderstood or intentionally misrepresented in this manner,” Jacqui O’Sullivan, executive for corporate affairs at MTN, said at the time.

According to O’Sullivan, MTN’s objective with this project is not to close stores, but to rather increase, not only the company’s store footprint, but also its BBBEE ownership of MTN stores.

“The plan will see MTN increasing its number of stores in the coming two years, creating businesses for new owners and new job opportunities for new store employees. The opportunity for staff to apply to become a store owner is not a once-off opportunity.”

MTN had not responded to ITWeb’s request for its reaction to the ruling by the time of publication.

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