SA’s Telkom, unions in groundbreaking deal

Telkom on Tuesday announced the successful conclusion of a new two year Collaborative Partnership Agreement (CPA) with organised labour that allows the company to introduce widespread performance-based remuneration for both individuals and teams.

The agreement has been signed between Telkom and two of the three recognised unions within the company. The South African Communications Union (SACU) and Solidarity have signed the agreement, which is effective from 1 June 2016.

The Communications Workers Union (CWU) has agreed to the new partnership agreement in principle. Currently one legacy matter, which is unrelated to the new partnership agreement, is in arbitration.

The agreement covers Telkom’s 11000 unionised employees, out of a total head count of just over 13 500 at the end of March 2016, but does not include employees in Telkom subsidiaries, such as Business Connexion and Trudon. Currently, Telkom has around 12 500 employees.

The Collaborative Partnership Agreement allows Telkom to incentivise individual and team performance. While Telkom will not be offering any employee an annual increase this year, the company is offering employees the opportunity to earn up to 12% more each month, should they meet and exceed sales and customer service targets.

As part of the agreement, Telkom will not enforce retrenchments for the next two years, outsourcing to be limited to less than 1,000 employees over the next two years.

Furthermore,  Telkom will introduce a new variable incentive plan, known as “Performance Pays”, which will replace the previous Short Term Incentive plan, while performance Pays will focus on customer satisfaction and front-line productivity metrics.

An employee who is achieving their targets can expect to earn approximately 6% more than last year, under the Performance Pays scheme, with further upside for over-achieving employees.

Sipho Maseko, said: “This agreement heralds a new and exciting chapter in our relationship with organised labour. It creates stability, sustainability and a new way of working which will benefit our employees and our customers. I am looking forward to working closely with organised labour in the future to improve working practices and employee engagement.”

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