Plan to delay Post Office staff cuts fails

The South African Post Office’s joint business rescue practitioners have announced that attempts to secure funding from the Temporary Employment Relief Scheme (TERS) have failed.

They lodged an application with the Commission for Conciliation, Mediation & Arbitration (CCMA) following discussions with unions in the hopes of delaying staff cuts.

Over the last few years, the Post Office’s financial situation has deteriorated significantly, and it has struggled to pay debts and salaries.

It was placed in business rescue last year to halt its liquidation and pave the way for a R2.4 billion bailout allocated by the National Treasury.

Its business rescue plan included substantially reducing its 11,083-strong workforce to cut its annual wage bill by around R1.2 billion.

Staff were issued with retrenchment notices that would see their positions terminated on 30 April 2024 (yesterday).

The Congress of South African Trade Unions said the Post Office and relevant unions signed an agreement to withdraw retrenchment notices to some impacted workers.

The deal followed talks between the Post Office’s business rescue practitioners, labour unions, South Africa’s ministers of labour and communications, and the Unemployment Insurance Fund (UIF).

The unions include the Communication Workers Union, the South African Postal Workers Union, and the Democratic Postal and Communications Union.

According to the agreement, the UIF’s TERS would help pay employees for the next 12 months.

During this period, a “progressive turnaround plan, not based upon culling staff” will be put in place.

However, the CCMA was unconvinced.

It noted that TERS was revitalised following the Covid-19 pandemic to provide temporary relief as an alternative to retrenchments for employers facing financial, employee, or operational distress.

However, the business must present a sound plan demonstrating the probability of a sustainable turnaround.

In the Post Office’s case, the CCMA ruled that the funding would merely delay the inevitable.

“The agreement concluded between labour and [the Post Office] does not provide job security as it states that the agreement will terminate 30 days after TERS relief period,” CCMA commissioner Willie Hlophe stated.

“The reality is, should TERS be successful, it would only delay and not prevent the retrenchment, which is against the primary purpose of the scheme.”

Hlophe noted that the business rescue plan identified the retrenchment of 6,000 employees as a remedial action to align the staff complement to the Post Office’s operational needs.

“In the circumstances, the committee has a legal obligation to comply with the rescue plan and cannot operate outside its confines,” said Hlophe.

“It is unclear what weight can be attached to the collective agreement concluded by parties, however, what is clear is that the agreement does not vary the rescue plan.”

Hlophe said the rescue plan can only be altered by following the correct process.

“The absence of a reasonable turnaround strategy, exacerbated by a significant labour cost which exceed its revenue, the committee concluded that applicant is not legible to participate in the scheme.”

The Post Office’s joint business rescue practitioners, Anoosh Rooplal and Juanito Damons, said they were disappointed with the outcome.

“We were hopeful that the TERS funding would provide a temporary relief to the bargaining unit staff members, as the funding would have effectively been used to up-skill and re-train staff for possible job placements whilst still earning a salary,” Rooplal said.

“The Department of Communications and Digital Technologies had also offered to assist with finding placement positions for staff after their upskilling.”

Rooplal said the funding could have helped employees while the Post Office stabilised and returned to growth.

In time, they had hoped positions could have been made available to affected staff.

Rooplal noted that the withdrawal of the termination letters was conditional on the success of the TERS application.

Since it was unsuccessful, the retrenchment notices stand. Rooplal said 4,889 employees who are part of the bargaining unit are affected.

“We tried our very best and acted in good faith, together with the unions, to make a final attempt to apply for TERS relief funding, to limit the impact on possible retrenchments and provide a temporary relief for the bargaining unit,” stated Rooplal.

He said that had the application been successful, they believe it could have led to a better outcome for affected employees and their families — even if it was only for a short period.

“We are conscious of the turmoil that this application and subsequent rejection will and has caused the bargaining unit staff members and their families and for that we are deeply sorry.”