MTN issues retrenchment letters as it restructures
Solidarity has slammed a planned retrenchment process at MTN as “immoral” and “illegal”, while MTN has criticised the trade union’s statement as “purposefully alarmist”.
The strong statements come after the mobile network sent a letter to employees informing them of a planned Section 189 restructuring that could see 136 people cut from its finance department.
The operator said the restructuring formed part of MTN’s Finance Modernisation initiative based on its Ambition 2025 strategy.
“The reason for the proposed structure is to bring Level 1/Level 2 structures in the Finance Department in line with the new finance operating model with the aim of repositioning our business to align with the Ambition 2025,” the letter stated.
“In the proposed retained organisation at Level 1/Level 2, there will be a total of approximately 327 in scope employees, which may result in a reduction of 136 employees.”
MTN explained that employees impacted by the restructuring would be considered first for any available positions advertised in the new operating model.
“For the sake of clarity, impacted employees will be considered first for available positions,” MTN said.
“Where appropriate, available positions will be simultaneously advertised internally and externally, for the purposes of advertising only.”
“This may be due to the scarcity of skills or current risk assessment of available capabilities for the impacted positions.”
Before employees are retrenched, MTN will offer the following alternatives:
- Early retirement, subject to business operational requirements.
- Voluntary severance, subject to business operational requirements.
- Placement in suitable and reasonable alternative positions across the broader MTN organisation. Should an employee reject a reasonable alternative offer of employment, they will not be entitled to a retrenchment package or severance pay.
But Solidarity said the announcement of retrenchments while the company’s financial figures indicated huge success — including profit of around R14 billion in its latest financial year — was callous and immoral.
“In times when inflation and fuel prices are skyrocketing, and even people who are lucky enough to have a job are struggling to keep their heads above water, the company is playing with people’s lives,” said Solidarity network coordinator Linda Senekal.
“To dismiss such a significant number of your labour force despite billions in profits that even exceeded the company’s own expectations paints a glaring picture of South African society and the role large companies like MTN play in it,” Senekal added.
The union said it believes the retrenchments would be illegal if they were done as part of MTN’s intended takeover of Telkom.
“If MTN foresees that there will be a duplication of roles if it were to buy Telkom, then it must deal with it in terms of the prescribed section 197 process,” Senekal said.
“MTN cannot hide behind the appearance of a normal retrenchment process,” Senekal said. “The lives of employees and their dependents are at stake, but MTN’s management does not comprehend this.”
Senekal said Solidarity’s members in the MTN workforce would receive its continuous support and not be left to their fate.
“It will be fatal for these employees if MTN’s retrenchments continue unchallenged,” Senekal said.
“MTN should know better, and it should adhere to existing regulations while considering the well-being of its employees.”
“MTN must not disregard this and try to cover it up by telling its employees that a meaningful consensus will be reached while the retrenchment process has already been set in motion.”
Charles Molapisi, MTN South Africa CEO
Responding to Solidarity, MTN said it is creating more than 450 new jobs in digital, technology, financial technology, wholesale, and enterprise spaces.
“The reshaping of certain departments is requiring some employees to apply for revised or new roles,” the company explained.
“Last week, employees in MTN’s finance department were formally notified of the transformation process through the Section 189a process.”
MTN says the communication serves to legally inform employees that a transformation process is underway that may have an impact on some roles.
“A total of 173 impacted people will be required to apply for the 205 new or changed roles. Some roles will be outsourced,” MTN explained.
MTN said it is important to note that this transformation has been underway for two years.
“It is disappointing that Solidarity has chosen to adopt an untrue and purposefully alarmist narrative, that seeks to create an entirely false link between a project that has been running for two years, with a potential acquisition (of Telkom) that is in the most embryonic of stages,” said MTN.
“Our people are the backbone of our business and, in this current tough economic climate, retrenchments will remain a very last resort.”
MTN said its focus would be on reskilling, upskilling, deployment into other areas of the MTN group, as well as possible external business partnering.
“This sort of callous fear-mongering is insensitive and unfair to a process that seeks to build for the future in an inclusive and innovative manner.”
Loading ...