MTN welcomes court‘s decision to deny union relief

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Jacqui O’Sullivan, executive for corporate affairs at MTN SA.
Jacqui O’Sullivan, executive for corporate affairs at MTN SA.

MTN SA has welcomed a court decision not to grant the Communication Workers Union (CWU) the relief it sought in a matter involving the sell-off of the telco’s branded stores.

“As you know, last year, MTN embarked on a process to sell some of its stores. Through this process, we are developing an ownership model that speaks to the demographics of our country and that will help drive BBBEE in this industry by lowering the barrier to entry, introducing new competition into the market and will help grow our store footprint,” says Jacqui O’Sullivan, executive for corporate affairs at MTN SA.

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

MTN’s plan had not been well-received by employees, who feared their jobs may be on the line.

The CWU sought a court interdict, citing section 197 of the LRA.

However, this week the court ruled in favour of MTN, saying: “There is no general right to consultation or to information in a section 197 process. Section 197 (6) specifically provides for negotiation to conclude an agreement, should the parties elect to do so, and for the disclosure of information that would allow parties to engage effectively in negotiations.”

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.”

Commenting on the court’s decision, O’Sullivan says change of this nature that impacts employees is difficult and creates anxiety for those affected.

“MTN has sensitively and regularly engaged with all affected employees and we will continue to do so, as we undergo this store ownership transformation.”

O’Sullivan notes MTN is optimising its portfolio, which means it is encouraging dealers to own stores in their respective regions.

“We believe that stores are best run by those from that specific town, community, city or province. We want our BRC stores to be run by hands-on owners who personally connect with their stores, employees and customers, giving our customers the quality service they deserve.”

O’Sullivan says the telco is also providing “an exciting employee value proposition, whereby we are offering qualifying employees the opportunity to own their own MTN store”.

Furthermore, she says MTN has undertaken many discussions with its employees affected by this transformation, throughout the Section 197 process, which will see MTN employees transferred to their new employers.

“The first transfer took effect on 1 June 2020. The Section 197 process does not require consultation with unions. The S197 is not a consensus-seeking process; however, as a courtesy, MTN did engage with the CWU,” explains O’Sullivan.

“On 22 May, the CWU lodged an urgent interdict to stop the transfer of the stores, as planned for 1 June. On 27 May 2020, the matter was heard in the Labour Court, and on 1 June 2020, the Labour Court handed down a judgement; the judge dismissed the CWU’s application with costs and described the action by the CWU as a ‘meritless application’.”

The CWU has reacted with outrage to the court’s ruling, with secretary-general Aubrey Tshabalala saying: “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 the section 197 of the LRA by transferring workers with less benefits and the court sees no wrong with it.”

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