FEDUSA calls on President Ramaphosa to honour his commitments in the State of the Nation Address, by beginning with fixing Telkom.
15 February 2020
The Federation of Unions of South Africa has called on the President to join in the calls for the sacking of the Board and Executives of Telkom for their effective cannibalism of this once profitable SOE, and it’s current dishonest in engagements with organized labour. Through the CCMA mediated talks on Tuesday and Wednesday it has become clear to alliance partners of the South African Communications Union (SACU) – a FEDUSA affiliate – and the Communications Workers Union, among other labour formations that this Telkom leadership has no desire to find an alternative to retrenchments, and instead only wishes to remove staff and further cannibalise the company to inflate their bonuses.
The awarding of over R100 million in bonuses and other perks just 1 month before engaging in massive retrenchments is largely the clearest sign that these current retrenchment discussions are not taking place in good faith. The CEO alone has been rewarded for his failure with a R23 million bonus. These excessive bonuses, paying out a dividend in December, and the hobbling of Telkom’s technical workforce will not put Telkom on the path to recovery, instead it will continue the path of destruction for this once effective and profitable SOE.
Worse, while the company claims to engage in good faith negotiations with unions, it is trying to undermine employee unity by offering voluntary severance / attrition packages as an opening bribe, whilst deliberately waiting out the clock on its 60 – day consultation period.
These acts are a blatant violation of every rule under the Labour Relations Act, 1995, and defaming the letter and spirit of Section 189 consultations, the Telkom executive has once again exposed itself in the pursuit its cannibalisation strategy.
The failures of the company in the last few years have also been mostly the result of corruption and flawed strategy. Corruption tainted consulting company, Bain, has charged Telkom over R200 Million rand for a “cost-cutting strategy “ that has been thrown out, effectively wasting millions. Further, in this modern day of improving technology, Telkom has engaged in a backwards strategy of downgrading clients service, while simultaneously increasing costs. Unsurprisingly, these tactics of abandoning fibre for sub-grade mobile services have lost Telkom customers and revenue.
In this fourth industrial revolution which the president believes provides challenges – but also opportunities, it is clear that this Telkom executive has no capacity to adapt and transform the company to meet these challenges, and take advantage of the opportunities. If this corrupt executive and board are allowed to stay, the 3000 retrenchments will not be the end of this Telkom Saga, they will not stop until they have completely consumed what used to be an incredibly profitable and effective state owned enterprise.
We call on the President to honour his commitments in the state of the nation to grow the economy , stop corruption and repair state owned enterprises. A big step in doing this, would be joining with unions and putting pressure on the executives of Telkom to step down with immediate effect, and bring capable individuals in to return Telkom to it’s former prosperity.
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For interviews please contact
Riefdah Ajam
FEDUSA Acting General Secretary
079 696 2625
Keith Aimes
SACU Western Cape Organizer
076 720 2640
Issued by:
Frank Nxumalo
FEDUSA Media and Research Officer
072 637 8096
Email: research @fedusa.org.za
