Telkom lauded for new deal to save jobs
South African fixed line operator, Telkom on Tuesday was lauded for signing a new two-year Collaborative Partnership Agreement (CPA) with trade unions that would allow it to introduce widespread performance-based remuneration for both individuals and teams.
The agreement, which is effective from 1 June, was signed between Telkom, the South African Communications Union (SACU) and Solidarity. The Communications Workers Union (CWU) agreed to the new partnership agreement in principle.
As part of the agreement, Telkom committed to no compulsory job cuts for the next two years and limiting outsourcing to less than 1 000 employees over the same period.
The agreement would cover Telkom’s 11,000 unionised employees, out of a total head count of just over 13,500 at the end of March 2016, but would not include employees in Telkom subsidiaries, such as Business Connexion and Trudon.
Currently, Telkom has around 12 500 employees.
Commenting on this development on Tuesday, chief executive consultancy firm Strategy Worx, Steven Ambrose lauded the parastatal, for this move.
Ambrose said that this latest announcement by Telkom showed that careful negotiation could result in a win-win situation for both the company and labour.
“Telkom as a state owned enterprise had done well to turn the company around, and had shown that with the correct leadership and structures state-owned enterprises could work,” Ambrose said.
“The deal for performance bonuses is a significant milestone in South African labour relations which has been characterized by militant action and unreasonable demands.”
A market related performance culture with a clear focus on the customer is the only way for any company to operate, and in the highly competitive, low margin, telecommunications space, it is absolutely critical.
Telkom Group chief executive, Sipho Maseko, said their turnaround strategy had allowed us to stabilise the business.
“The next chapter of the Telkom story must be one of growth and growth requires us to be better at attracting and retaining customers,” Maseko said.
Among the terms agreed upon the CPA were the introduction of a new variable incentive plan which would focus on customer satisfaction and front-line productivity metrics.
Telkom said an employee who was achieving their targets could expect to earn approximately 6 percent more than last year, under the Performance Pays scheme, with further upside for over-achieving employees.
On Monday, Telkom reported a stellar performance from its mobile business, which had reduced losses from R2.2 billion three years ago to R43 million in the year to the end of March, and was now breaking even on a month-to-month basis. - ANA