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Telkom and Organised Labour sign a three-year agreement

Telkom today signed a three-year labour agreement with the majority union, the Communication Workers Union (CWU). The agreement addresses the annual general salary increases for its bargaining unit staff as well as issues of past salary disparities.

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.

On average this settlement will increase the human capital costs by 6.8% over the next three years. The agreement, effective for a three-year period from 1 April 2013 to 31 March 2016, also provides for an accelerated process to address salary disparities. Telkom is determined to avoid unfair income differentials. The Agreement allows the Company to pursue its objective of an equitable remuneration system by adhering to the principle of "equal pay for work of equal economic value", in line with the Employment Equity Act.

The agreement stipulates that, for the next three years:

• The general salary increase will be based on 6% of the market's 50th percentile as per employee functional area
• Those employees below the 50th percentile of the market will receive an additional amount added to their total package
• All employees below the 75th percentile of the market will receive an increase on their total package
• All employees above the 75th percentile of the market on 31 March 2013 will receive a monthly pensionable once-off amount (no increase in their total package)
• The standby allowance will increase by 6%

Telkom has undertaken to further engage organised labour if the Consumer Price Index (CPI) moves above 7,5% and remains at that level for a minimum period of six consecutive months during the effective period of this agreement.

Telkom has also undertaken to conduct external salary benchmarking and share the results with the trade unions prior to implementing salary increases in the second and third year. Depending on whether the market 50th percentile reduces or increases, the status quo will either remain or revised values will be applied.

Increases for bargaining unit staff and all adjustments will be effective from 1 April 2013 and backdated accordingly.

Sipho Maseko, Telkom's Group CEO says, "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.

"At a time when Telkom is refocusing its strategic imperatives in order to ensure cost effectiveness and the sustainability of its business, it is commendable that all parties went into the substantive negotiation process fully cognisant of the challenges being faced and the teamwork that is required to overcome these ," concluded Maseko.

For further enquiries, please contact:

Telkom Park, The Apex 92 Oak Avenue Technopark Highveld Centurion

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

• fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
• fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
• interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
• fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
• Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
• W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
• mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
•  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
• other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.