Johannesburg - Telkom, Africa’s largest fixed-line operator, suspended plans to fire about half of its 19,000 employees pending a consultation process following opposition from the Solidarity labor union.
Telkom “agreed to further consultation with organised labor through an external, independent facilitator regarding the company’s restructuring and retrenchment process,” the Pretoria-based company said yesterday in a statement.
“Telkom has agreed to this process to ensure that all stakeholder views are considered and factored into the restructuring process.”
Telkom is targeting cost cuts of 5 billion rand through job eliminations to restore the part state-owned business after a decline in fixed-line use contributed to sliding sales.
On July 8, Solidarity said it would file documents to a Johannesburg labor court to prevent Telkom from making race a criteria in firing workers.
“Telkom undertook to suspend its current restructuring and retrenchment process,” Solidarity said in an e-mailed statement.
The agreement includes halting the process of using race when determining job cuts, according to Solidarity, which has close ties with the predominantly white Afrikaans community.
South African companies have to comply with legislation seeking to address racial inequalities that stem from apartheid rule, which ended in 1994.
Race-Based Dismissals
“The agreement sends a signal to employers all over South Africa that Solidarity will not tolerate race-based layoffs,” spokesman Marius Croucamp said in the statement.
“We also insist that restructuring processes take place in consultation with employees and be accompanied by a well-designed business strategy.”
Telkom is the second-best performer on the 164-member FTSE/JSE Africa All-Share Index this year, gaining 73 percent.
The stock was unchanged at 48.40 rand by the close in Johannesburg yesterday, valuing the company at 25.2 billion rand.
Telkom snapped a two year run of losses in the year through March due to cost cuts and a boost to the mobile business. - Bloomberg News