South African fixed-line operator Telkom said on Thursday it had signed a wage agreement with a union that would increase its personnel costs by 6.8% over the next three years.
The move will affect 16,800 employees belonging to the Communication Workers Union (CWU) and is meant to address the historical pay differences between white and black employees, the company said in a statement.
Two other unions, Solidarity and the South African Communications Union (Sacu) however, have not yet put pen to paper.
Negotiations between Telkom and unions began in March after Telkom announced that management and bargaining unit staff would be afforded the opportunity of applying for voluntary severance packages (VSPs) and early retirement packages (VERPs) until the end of August 2013.
In June Telkom said that 1,411 bargaining unit and 178 management employees exited up to 31 May 2013 as part of its bargaining process. The group has an approximate workforce of 21,000 people.
The telco noted that employee expenses increased by 14.5% in the year ended March 2013, primarily due to the R434 million cost relating to voluntary severance and early retirement packages, the average annual salary increase of 6.5% and a higher bonus provision.
Sacu, which has just under 4,000 members at Telkom requested that the Commission for Conciliation, Mediation and Arbitration (CCMA) issue a certificate of non-resolution, otherwise known as a strike certificate.
According to Sacu, the new Remuneration Model would mean that in year one 60% of employees will be getting increases on their total packages, in year two it will be reduced to 40% and year three to less that 30%.
Telkom said in a statement:
South African Communications Union (SACU) has indicated their intention to sign the agreement. It has requested time to conclude the balloting process that is currently underway. It is envisaged that SACU will sign the agreement early next week.
The multi-year agreement signed today will assist the company on its journey to restoring financial health and ensuring long-term sustainability by eliminating uncertainties over labour costs for the next three years. It will also allow the company to focus on managing its costs and vigorously attend to productivity challenges.
In order to offset the effect of increased remuneration levels on its financial position, the Company requires a huge improvement in productivity levels. The parties will engage in an inclusive process of determining specific productivity initiatives and interventions.
Sipho Maseko, Telkom’s Group CEO said: “We are extremely pleased to have reached a negotiated settlement with organised labour as we value the welfare of all our employees. Our partnership with labour has proved that we have managed to agree on what is beneficial to the employees as well as the sustainability of the company. Despite difficult current economic realities, Telkom together with organised labour, have utilised the process of substantive negotiations to collaboratively address critical issues within the context of the group’s sustainability.”
Article with Reuters