Volume 10, No.1 - February 2001

Never Again

The NFA and the dispute at Telkom

Background

The NFA and the dispute at Telkom By Neva Makgetla, COSATU Fiscal, Monetary and Public-sector Policy Coordinator For five months, COSATU and the CWU have been encountering bad faith and incompetence from Telkom in negotiations over proposed retrenchments.

The National Framework Agreement (NFA) for State Owned Enterprises essentially lays out a structure for interaction with government, and provides a guarantee that government will consult more than the LRA requires, at least about some forms of restructuring.

In June 2000, COSATU obtained a commitment from the government to strengthen implementation of the NFA, in particular by:

a. Fast-tracking responses to issues that labour raised,

b. Using the NFA to deal with all problems put forward by labour, without quibbling over whether they constituted "restructuring" or not, and

c. Ensuring that enterprises abided by the NFA, amongst others through shareholder compacts.

In July, Telkom announced plans to retrench and outsource a total of around 2500 workers. This fits into a pattern of waves of retrenchment that have led to the loss of over 15 000 jobs in the past three years.

COSATU and CWU approached the Department of Public Enterprises (DPE), which on 7 August held a meeting, attended by Telkom's CEO, that agreed that retrenchments would be frozen while CWU and Telkom reviewed the company's business plan in order to seek alternatives. As usual with the NFA, the agreement was not signed, although a written minute was read out and agreed at the meeting.

Telkom then delayed holding the necessary meetings with CWU, and when it held them, provided very vague information that did not give any justification for retrenchments. On 9 November, a meeting was held between COSATU, CWU, the Ministers of Communications and Public Enterprises and Telkom's CEO.

The Ministers proposed, and the parties agreed, that Telkom and CWU would meet as earlier agreed; if they had not reached agreement by 15 December, they would present a progress report to the two Ministers, who would propose a way forward. Telkom nonetheless re-started the retrenchment process by sending out notices on 11 December.

Kadar Asmal, acting Minister for both the departments of Public Enterprise and Communication in the week before Christmas, after discussion with the Minister of Public Enterprises, who was on leave, instructed Telkom to halt the retrenchment process until it had finished consulting with labour, as agreed on 9 November. The Telkom board agreed to consult with labour but refused to halt the retrenchment process.

CWU held a 24-hour sit-in at Telkom Headquarters in Pretoria. COSATU announced it was suspending the NFA until it could be assured that government would make state-owned enterprise live up to its commitments.

On the 23 December meeting, the Ministers of Public Enterprise and Communications, returned from leave, expressed the view that Telkom had indeed violated agreements reached on 7 August and 9 November. They said that they would issue a second instruction to Telkom to halt the retrenchments, and if that failed they would support an application for an interdict from CWU.

The Board of Telkom again refused to halt retrenchments. CWU filed for an interdict and lost, on the grounds that there was no urgency since a suit for dismissal following the retrenchment would provide adequate redress if necessary.

The Ministers of Public Enterprise and Communications submitted affidavits supporting the union argument that the retrenchments violated an agreement reached under the NFA. Subsequently the Ministers involved received a letter from the President reportedly suggesting that they had indulged in micro- managing Telkom and that this was a mistake. We have received no further communication from the government on this matter. Telkom has announced plans to retrench more employees, with a process of identification starting in March.