Cell C relations with union are back on track after CCMA ruling
JOHANNESBURG - Cell C’s consultations with organised labour in terms of section 189 of the Labour Relations Act are back on track after a ruling by the Commission for Conciliation, Mediation and Arbitration (CCMA) declared the process valid.
Cell C said on Friday that the CCMA had ruled that its section 189 consultation process was valid and might continue following the complaints raised by the Information Communication Technology Union (Ictu), the majority trade union at its operations.
Cell C’s chief legal officer, Zahir Williams, said that in making the ruling the commissioner had found there was no foundation or merit in the issues raised by the Ictu in respect of the consultation process.
“Cell C remains committed to being fully compliant with laws applicable to the organisational restructuring process that has commenced and will respect and uphold employee rights in this process,” Williams said.
Williams said the consultation session went ahead last Thursday, and Cell C presented its business case.
The next consultation was scheduled for Friday, August 14.
The process was delayed after the Ictu raised certain issues, including whether Cell C’s notice to start section 189 proceedings was valid.
Cell C, South Africa’s third-biggest mobile operator, which has been struggling to pull itself out of a debt hole, embarked on the section 189 process over its proposed plan to cut 40percent of its workforce.
In June, the company announced plans to cut 960 of its total staff complement of 2500, saying it was part of the implementation of a new organisational structure after many years of under-performance and significant losses.
To claw back the losses, Cell C established a four-pillar turnaround strategy, which was put in place in early 2019 to put the company on a path to long-term sustainability. One of the central pillars of the strategy was a focus on operational efficiencies across Cell C’s entire business.
The company said efforts to streamline the business included cost savings through procurement cuts, a year-long hiring freeze, a review and discontinuation of certain product offerings. However, these efforts were not enough and Cell C had to review its operating model and inefficient organisational structure, it said.
“The success of Cell C’s turnaround strategy, therefore, requires a new and more efficient operating model and the current restructuring process is intended to enable the company to achieve this outcome,” said the company.
Experts have previously warned that if the turnaround strategy did not put the company in a sound financial footing, as was hoped by the company’s directors, it was highly likely that the business would be liquidated sooner rather than later.
In May, the Competition Commission gave its conditional approval for an entity called Gatsby Security SPV to acquire “certain aspects” of the mobile operator as part of a recapitalisation programme.
Gatsby SPV is a “ring-fenced, newly incorporated special purpose vehicle which was incorporated for the sole purpose of entering into the proposed transaction”.