Johannesburg - Fixed-line operator Telkom says it has inked a new two-year deal with unions that will allow it to introduce widespread performance-based remuneration for both individuals and teams.
The deal will see staff earn bonuses on top of their salaries, but no pay hiked this year, Telkom says.
The agreement has been signed between Telkom and two of the three recognised unions within the company. The South African Communications Union (SACU) and Solidarity have signed the agreement, which is effective from June 1.
The Communications Workers Union (CWU) has agreed to the new partnership agreement in principle. Currently one legacy matter, which is unrelated to the new partnership agreement, is in arbitration. Telkom looks forward to closing out this agreement with CWU, Telkom says in a statement issued on Tuesday.
The company this week announced a 15.5 percent rise in normalised headline earnings for the year to March 31, marking the conclusion of a three-year turnaround strategy implemented in 2013.
Read also: Telkom earnings increase by 15%
Telkom reported 3 878 job cuts and reduced losses at its mobile business during the financial year. Normalised headline earnings per share (HEPS) increased to 658c, while operating revenue gained 13.9 percent to R37.3 billion.
No retrenchments
As part of the new agreement with unions, Telkom has agreed not to have forced retrenchments for two years, and to limit outsourcing to less than 1 000 staff over the next two years.
The agreement covers Telkom’s 11 000 unionised employees, out of a total head count of just over 12 500, but does not include employees in Telkom subsidiaries, such as Business Connexion and Trudon.
“Our turnaround strategy has 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,” says CEO Sipho Maseko.
Read also: Telkom Mobile shines in results
“The past three years have been hard on our people but, with the turnaround behind us, we must look to the future with confidence. This agreement with organised labour is the result of many months of hard negotiations and extensive consultation. The open and transparent approach of organised labour has helped us achieve this important milestone.
Together, we are now in a position to regularly reward employees who have the right attitude and who truly extend themselves, to always put the customer first.”
Under the new deal, staff will not get a pay rise this year, but have the opportunity to earn up to 12 percent more each month, should they meet and exceed sales and customer service targets. From April next year, staff will get a 6 percent increase on basic pay. Inflation is currently 6.2 percent.
· Telkom says an employee who is achieving their targets can expect to earn about 6 percent more than last year, under the Performance Pays scheme, with further upside for over-achieving employees.
Organised labour has agreed to support the plan.
IOL