Johannesburg - Times Media Group (TMG) faces legal action from pensioners accusing it of reneging on a 2001 agreement to pay increases to their post-retirement medical aid subsidy at the same rate as staff salaries increase.
The company told the pensioners last year that because it did not increase salaries for staff it would not raise subsidies for the pensioners, who have instructed Bowman Gilfillan, a Sandton law firm, to pursue the matter on their behalf.
In a letter dated April 10 addressed to TMG chief executive Andrew Bonamour, the attorneys instructed him to provide undertakings before the close of business today or they would obtain a punitive cost order compelling the company to comply.
“We have instructions to demand from you… that TMG immediately remedy its breach and to provide us with an undertaking that you will increase the pensioners [post retirement medical aid subsidy] with immediate effect and retrospectively to January 1, 2014,” they said in a letter which Business Report has seen.
They also sought a written undertaking that TMG would keep to the agreement in future and requested details of the latest actuarial valuations of the subsidy and actuarial assumptions on which it was based.
The situation adds to pressure Bonamour already faces after authorities launched two separate probes into shares that were traded early last month, during the company’s closed period.
Bonamour said he had no comment yesterday.
The agreement was established before he joined the company and appointed as chief executive last year.
TMG, which publishes the Sunday Times, is a competitor to Independent Newspapers, which publishes such titles as the Cape Times, The Mercury, The Star and Business Report.
The attorneys believe that approximately 700 pensioners are entitled to the subsidy.
Jimmy Mould, a former managing director of the Sunday Times and one of the pensioners, said they had previously, unsuccessfully, requested contact details for the pensioners to ascertain the true number of subsidy holders and to form a class action against the company.
In the latest company results for the six months to December last year, TMG said the liability was R273 million by the year to June 2013, subsequent to which the company offered a voluntary buyout to relevant employees and retirees.
It said by December the liability was valued at R87m and it intended to reduce this over time. - Business Report