FEDUSA Condemns Telkom’s Gangster Mentality as the Chief Architect of Retrenchments and Job Losses

18 October 2019

The Federation of Unions of South Africa (FEDUSA) has strongly condemned state telecommunications utility, Telkom’s callous attitude towards the welfare of its employees as demonstrated by its underhand manipulation of Section 197 of the Labour Relations Act (LRA)in recent times in order to retrench them by proxy or getting other companies to lay-off workers on its behalf.

The section allows companies under operational distress to transfer employees to a going concern for a fee and under the same wage levels and conditions of employment for an agreed period of time. If the new employer decides to retrench workers within the first 12 months, the old employer is legally required carry the costs of retrenchment packages. Both Telkom and the five companies that have so far made use of Section 197 are acutely aware of this clause.

What has been of great concern to FEDUSA and the South African Communications Unions (SACU), its affiliate at Telkom is that three of these companies including BCX, WNS and PERX have all retrenched former Telkom employees and reduced their salaries of those still in their books after conveniently waiting the statutory 12 months to pass and empowering Telkom to do a Pontius Pilate. It is disingenuous to argue that such a development is a coincidence, because it is not.

Telkom has strenuously projected itself as the doyen of state-owned enterprises. But while it has callously thrown workers to the wolves by cynically manipulating Section 197, it has not been found wanting in paying generous packages to its executive management according to its 2019 Annual Report which shows that Group Chief Executive Officer Sipho Maseko, to cite but one example, was paid a whopping R23.2 million, made up of a guaranteed salary of R8.3 million, a bonus of R7 million and a vested share payout of R5.3 million among other incentives.

In 1991, Telkom had just over 67,000 employees – making it a huge employer in the country. This number declined over the next three years to just over 60,000 employees in 1994 and then started to drop more aggressively up to 2000, when it counted 49,000 employees in its ranks. The sharp drop in employee numbers continued over the next 10 years, and in 2010 Telkom had 23,247 staff members. As of March 2018, Telkom had 10,143 employees.

Telkom’s latest retrenchment strategy involves the undue coercion of landline subscribers to migrate to wireless systems, whereby new redundancies and job losses will follow. Once again, profits above people prevails.

As Government holds a 40% stake in Telkom, FEDUSA demands that President Ramaphosa extends the same courtesy and conviction to this SOE as demonstrated with others, to ensure that the bloodbath is grinded to a halt, as the Telkom tale only makes an entire mockery of the 2018 Jobs Summit commitments.

(462 Words)

For interviews please contact

Riefdah Ajam

FEDUSA Acting General Secretary

079 696 2626

Keith Aimes

SACU National Spokesperson

076 720 2640


Issued by:

Frank Nxumalo

FEDUSA Media and Research Officer

072 637 8096

 Email: research @fedusa.org.za