Strike threat at Cell C over job cuts
Cell C, South Africa’s third-biggest mobile operator, which is grappling under severe liquidity constraints that resulted in it defaulting on its obligations to lenders, has proposed reducing its workforce by up to 40percent, citing operational requirements.
The telecommunications company said that, of 2500 positions, 960 might be affected by the restructuring.
ICTU, the majority union at Cell C, said on Friday that retrenchments were not an option given the R4billion recapitalisation programme approved by the Competition Commission last week aimed at keeping the company afloat and jobs secure.
ICTU spokesperson Thabang Mothelo said workers would down tools until the section 189 notice was withdrawn, adding that investors, not management, would be the biggest losers.
“We are not interested in negotiating. The ball is in Cell C’s court to either comply or go to the battlefield,” Mothelo said. Section 189(1) of the Labour Relations Act provides that, before retrenching, employers must consult affected employees.
A Cell C spokesperson said the section 189 consultation process would begin next week. In its section 189 notice, Cell C said it intended to consult employees about possible redundancy and contemplated retrenchments. It cited group under-performance and R33bn in losses, including a R4.2bn loss in 2019. The company said the biggest obstacles had resulted from the changing and competitive environment, and a recapitalisation in 2017 that burdened the business with unsustainable debt.
Mothelo said the union had bent over backwards during last year’s wage negotiations after agreeing to a 6percent salary hike, instead of an 8 percent increase, in order to sustain CellC’s liquidity and avoid retrenchments. He said the acceptance of the 6percent increase included the consideration that Cell C would not retrench.
“We will look like fools, because we watered down our wage demands, and we watered down our demand for a cash payment for workers, only for workers to be retrenched. It would not make sense,” said Mothelo, adding the ICTU would not accept anything less than the withdrawal of the retrenchments notice to workers. Mothelo said the union met with Cell C shareholder Blue Label Telecoms, together with senior management of Cell C on Friday, and it was agreed that a task team should be formed to look into matters raised by the union.
The union and the company’s executive are scheduled to meet again today.