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Telkom slams “unfounded” retrenchment allegations

Eugene morokolo Jul 10,2014 0 Comments

Telkom Nigeria  Telkom slams “unfounded” retrenchment allegationsTelkom has come out to “clarify” what it calls the baseless allegations by labour unions regarding the process and criteria under consideration surrounding its restructuring process and says allegations that Telkom will target 9500 employees in the next six months are also unfounded.

Trade union Solidarity launched an “extensive” campaign against Telkom’s current retrenchment process. As part of this campaign the trade union says it will lodge documents with the Labour Court in Johannesburg in a bid to stop Telkom’s use of race as a criterion during the process.

In response Telkom says prior to and throughout the restructuring process it has consulted with all stakeholders including representative labour unions to ensure that the facts are consistently communicated.

According to Johan Kruger, Deputy General Secretary of Solidarity, Telkom repeatedly made it clear during consultations with trade unions that it would use race as a selection criterion during the retrenchment process. “Retrenchment is a ‘no fault’ dismissal. In terms of legislation, race may not be used as a criterion during a retrenchment process. Solidarity has therefore embarked on an extensive campaign to put a stop to this unfair practice,” says Kruger.

Telkom says it rejects allegations that race is being considered as the only criteria for the placement of employees in Telkom’s new structure.  “The fact is that Telkom’s focus is on retaining the right skills for its turnaround strategy and will consider several criteria throughout its restructuring process”, it said in a statement.

The Telco says these criteria include qualifications and experience; the employee’s potential; the last in, first out principle when more than one employee qualifies for appointment into the same position and employment equity.  “It is important to note that employment equity is only one of the four criteria applied to this process and that Telkom, as any South African company, is required in terms of the Employment Equity Act to comply accordingly” the statement read.

In fact, the entire management pool that Telkom seeks to reduce from, in the consultative process currently underway, is made up of 2 650 managerial staff. The company is not targeting specific numbers of individuals; it aims to reduce the number of management layers and achieve an employee cost : revenue ratio of 25% over the next 5 years. Employee costs currently make up 30% of revenue.

The objective is to bring leadership closer to customers by removing unnecessary layers of management, which will improve customer service and experience. Alternatives such as outsourcing and joint ventures may also be explored as part of the business and organisational restructure in the future.

Telkom undertook a thorough review and investigation of all options before deciding to issue a Section 189 notice these include offering voluntary separation and early retirement options, expanding and diversifying revenue base, reducing costs and divesting from non-performing investments.

Telkom says this restructuring process is an imperative for the survival of the business into the future and its success. “Telkom has underperformed for several years as its share of market in fixed voice and data continues to decline and fixed to mobile substitution has intensified competition. The fixed voice market makes up more than half of Telkom’s revenues, and is in decline”.

The company says the intention is to build the right organisation for the future by improving the business performance and unlocking efficiencies. The company says it will continue to explore other avenues that can assist with cost reduction in all areas of the business.

Kgruger says it is crucial that Solidarity take action on behalf of its members at Telkom and all other employers. “We are prepared to take the matter all the way to the Constitutional Court if necessary. This type of practice is destructive and will simply give employers a way to improve their BEE grading during retrenchment processes,” according to Kruger.

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