Telkom management battle heads to CCMA

 ·29 Apr 2014
Telkom shattered 2

Telkom is facing a battle from many managers and senior managers, who have tabled a “Managers Group Grievance” against the company for what it calls “unfair treatment”.

Telkom CEO Sipho Maseko said in early April that the company plans to cut R1 billion in costs every year for the next five years as part of a restructuring process.

Bloomberg reported in January that Telkom may fire as many as 1,000 managers and cut the approximately 21,000-strong workforce by almost a third over five years, to turn the company around.

Maseko said that there will be job cuts, and management-level position are among the most likely positions to be trimmed.

Managers Group Grievance

Towards the end of 2013, many of Telkom’s level 4 and level 5 managers joined forces to address the group’s concerns.

The “Managers Group Grievance” was submitted to Telkom’s top management on 20 December 2013.

The concerns included:

  • The manner in which Group HR, in bad faith, abandoned their commitment to facilitate an open and transparent communication channel to Management regarding the reward model and package structures;
  • The lack of transparency on the implementation of the Differentiate Remuneration Model (DRM), and on how the 3% annual salary increase for managers was calculated;
  • The latest rationale behind the Board’s approval of exorbitant increases for Top Management, 6% for operational staff and only an average of 3% for Management;
  • From the perspective of Management, none of the values of CHART (Continuous Performance Improvement, Honesty, Accountability, Respect, Teamwork) are honoured or promoted by Top Management and the Board of Telkom SA;
  • The current Portfolio of Evidence (POE) principle was implemented without consulting the performers/supervisors.

“Management and their dependents have suffered severe financial consequences in recent years and there is no end in sight,” the management group said.

The group suggested various interventions in addressing its concerns, including:

  • The establishment of a management forum as a channel to discuss and resolve issues to the greater good of Telkom;
  • Clarity on average percentage salary adjustments for Top Management, Management and Operational staff, from 2004 to 2013, and the criteria used regarding the allocation of salary adjustments and percentage increases for the past 10 years;
  • As part of improving faith in the DRM system, Top Management should specifically clarify the bonus percentages peer companies offer employees, for each employment level (rank);
  • Demanding henceforth, with yearly salary increases, that Management shall be informed on the percentage increase that Management may expect, at the time that Telkom makes such offers to the Unions for Operational Staff;
  • Top Management must apply the DRM to all Telkom employees, or suspend the DRM system until all employees agree to allow the DRM system to dictate future salary adjustments;
  • Management requests that the company must rectify where they have acted unfairly or inconsistently over the past decade and where we have received increases below the CPI levels, even though the rest of the company was treated fairly due to Union support;
  • Management requires written clarification on how Telkom’s performance management system shall henceforth impact on salary adjustments for Management to restore faith in the system and set quantifiable expectations, when a new performance cycle commences;
  • A need for the company to give assurances that Management will not be further victimised of as a result of this grievance action;
  • That managers are treated fairly and consistently;
  • Transparency on management salary increases from Telkom.

According to communications from the group, it met with unions on 24 March 2014 to establish the way forward with the Managers Grievance.

This, the group said, was necessary because there was no commitment or feedback from Telkom after an initial meeting in January 2014 to try to address the concerns.

In early April 2014, the group sent an email to Thami Msubo (ME of HR) and Sipho Maseko (Group CEO) for action on the Managers Group Grievance.

The group said that Msubo and Maseko did not respond to the issue, and union Solidarity has now referred the matter to the CCMA. The South African Communications Union (SACU) is expected to join Solidarity in the battle.

Telkom performance management system

One of the prominent grievances surrounds Telkom’s new performance management system.

According to the group, Solidarity had two meetings with Telkom regarding the system. However, it said that “Telkom made a few promises, but have not yet finalised any of its promises”.

SACU noted that Telkom was not willing to engage with employees (managers) on the new performance management system.

CCMA arbitration proceedings regarding this issue are scheduled for the 13th of May 2014.

Marius Croucamp, Solidarity’s spokesperson, confirmed the dispute with Telkom. He said that the union tried to resolve the issue with Telkom, but no satisfactory outcome could be reached.

Telkom was asked for comment on the Managers Group Grievance and the new performance management system, but the company did not respond by the time of publication.

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