Independent Online

Monday, August 15, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

SA Post Office defends its turnaround vision as the CWU turns to court over non-payment

SA Post Office (Sapo) yesterday defended its vision of a turnaround of the troubled state-owned entity (SOE) as the Communications Workers’ Union (CWU) announced plans to take the cash-strapped entity to court in March due to non-payment of medical aid and pension fund contributions. Picture Henk Kruger/Cape Argus

SA Post Office (Sapo) yesterday defended its vision of a turnaround of the troubled state-owned entity (SOE) as the Communications Workers’ Union (CWU) announced plans to take the cash-strapped entity to court in March due to non-payment of medical aid and pension fund contributions. Picture Henk Kruger/Cape Argus

Published Feb 22, 2022

Share

SA Post Office (Sapo) yesterday defended its vision of a turnaround of the troubled state-owned entity (SOE) as the Communications Workers’ Union (CWU) announced plans to take the cash-strapped entity to court in March due to non-payment of medical aid and pension fund contributions.

Clyde Mervin said the union was consulting its lawyers to file the case.

Story continues below Advertisement

“I think it is reckless trading that the Post Office is not paying contributions towards employees’ benefits. Employees’ medical aid was suspended because of non-payment. We are definitely going to court,” he said.

Sapo, which has been under administration since November, with questions around its status as a going concern, has been struggling to pay contributions towards medical aid, the Unemployment Insurance Fund (UIF) and the pension savings of its workers due to its serious liquidity challenges.

But Johan Kruger, a Sapo spokesperson, said yesterday that the Post Office had not received any formal notice regarding such action.

He said over the past 10 months, Sapo had been doing its best to pay the outstanding staff benefits − having negotiated with the relevant institutions.

“Sapo is in the process of implementing its comprehensive ‘Post Office of Tomorrow Strategy’. This plan is aimed at the turnaround of the business towards sustainability. Some aspects are already being implemented and there are signs of improvement. In some areas, Sapo has signed agreements with various e-commerce companies,” he added.

The new strategy was underpinned by pillars aligning with the post Covid-19 economy, which had had a negative impact on the traditional postal business globally. Also, Sapo has been in decline since 2013, where the signs of a declining mail business started emerging. There were also other factors that affected the business.

Story continues below Advertisement

“Digitisation and modernisation are core to our strategy to ensure that the archaic systems are being updated. This will also include the creation of a capable organisation, by upskilling and training the employees. There are various other initiatives that will change the fortunes of the SA Post Office, when implemented,” he said.

Kruger said it was important to note that the financial challenges of Sapo were not an overnight phenomenon. The state-owned entity had been in decline over a long period of time.

“This means that we are in the process of liquidating huge historical debt. This will take some time, and the success of the strategy itself is dependent on funding,” he said.

Story continues below Advertisement

In November, Sapo asked the government to assist it in its financial woes. It also said it would use some of its revenue to cover the arrears in employee contributions to its medical aid scheme provider, MEDiPOS.

Sapo’s chief executive Nomkhita Mona also asked Parliament for a bailout of R8 billion as the SOE owed the SA Revenue Service R600 million for taxes relating to salary payments.

But Parliament’s standing committee on public accounts in November blasted the entity for failure to table its 2020/21 annual report and financial statements.

Story continues below Advertisement

At the time, Deputy Communications Minister Philly Mapulane said the department’s R8bn bailout application to National Treasury was unsuccessful for the upcoming three-year medium-term expenditure framework, which includes R1.8bn for the coming year.

Kruger said the Sapo had recently successfully launched the online renewal of motor vehicle licences − receiving overwhelming interest from South African vehicle owners for this new (online) service.

“Part of the turnaround strategy is also the appropriate upgrading of facilities to suit the changed postal landscape,” Kruger said.

Former Sapo chief executive Mark Barnes, who departed in August, 2019 made headlines a few weeks ago when he offered to buy the parastatal with a consortium, saying he wanted the consortium to own at least 51 percent of Sapo.

But Mervin said Barnes’s proposal was not a solution for Sapo. “The current strategy is fine, it just needs a leader who will implement it properly. Barns wanting to buy the Post Office shows that the company has potential. I wish the government would realise this,” he said.

Mervin said Sapo’s problems started a few years ago and they haven’t recovered since. This was not helped by a string of chief executives, and workers who have not received a salary increase for the past two years,” he said.

Mervin said the company needed strong leadership to transform itself and thrive in business.

“How do you transform a business if workers don’t have tools of the trade? That is what makes it even worse. A postman who rides a bicycle can’t deliver mail because there are no bicycles. If workers have the tools to do their jobs, the Post Office would be efficient. The government needs to step up with interventions for the current Sapo executive. We also need some outside experience to assist, as Sapo is in crisis. But we believe privatisation is a no-go area,” he said.

He added: “What has the company done with all the bailouts it received? How does the company account for them? I believe the problem is with the company’s management − from its CEO and executives, there is no accountability…”

A shop steward, who didn’t want to be named, reiterated Mervin’s comments on the difficulty of working at Sapo, saying the company systems were mostly offline.

“The Post Office is going bankrupt. We can’t give quality service because our infrastructure is old. Yesterday, we were offline for four hours, How do you tell clients? We sometimes send clients to other mail services as we can’t promise parcel delivery.”

[email protected]

BUSINESS REPORT ONLINE

Share