FEDUSA Slams Perx Plans to Retrench Ex Telkom Employees

4 October 2019

The Federation of Unions of South Africa (FEDUSA) has slammed telecommunications company Perx’s plans to retrench employees it outsourced from Telkom only 15 months ago, promising that it will look after them. This is after Perx issued a Section 189 Notice to 400 employees in terms of the Labour Relations Act (LRA) that allows an employer to lay-off staff for operational reasons after consultations with their trade union representatives.

This majority of the affected workers are members of the Alliance, South African Communications Union (SACU) – an affiliate of FEDUSA, and Communication Workers Union (CWU) – an affiliate of Cosatu- are what is left of the 600 employees who were outsourced from Telkom in April 2018 in terms of Section 197 of the LRA.  All of the affected staff is employees that was transferred in terms of the section 197 process. One of the key provisions of Section 197 is that workers’ new salaries and other conditions of employment at the new company or employer cannot be materially different from those at their old company or employer. However, the principal argument that new employer Perx has advanced at the CCMA Section 189 consultations that commenced last month is that it can no longer afford to pay salaries levels that these workers received at old employer Telkom despite the fact it formally pledged that it can do so following due diligence and a service level agreement with the state agency.

Perx has argued at the CCMA that it will have to retrench these workers if fails to secure an agreement with SACU and CWU on an alternative arrangements which is to remove its medical aid and pensions contributions to former Telkom employees and their salaries from R23 000 a month to between R8 000 and R10 000 a month that it pays its own employees.

The Perx Section 189 Notice points to a worrying trend. Perx has now become the third company to which Telkom has outsourced workers, that is also planning retrenchments after BCX and WNS which actually effected retrenchments. Like Perx, the latter had also committed to upholding the requirements of Section 197 following due diligence processes. Although Telkom is not legally responsible for these retrenchments after 12 months have passed in terms of Section 197, the decision to outsource its own employees in the first place, casts a visible shadow over their fate.


(415 Words)

FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry.

See www.fedusa.org.za for more information.