UPDATE: Post Office says unpaid workers' medical and pension contributions due to revenue declines

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Post Office
  • SA Post Office workers have received a letter from MEDiPOS Medical Scheme which claims that SAPO has not paid contributions worth R213.3 million since 1 April 2020.
  • The Communication Workers Union also claims that retirement have been deducted from payslips, but not handed over to retirement administrators.
  • The Post Office said the outstanding payments could not be made due to the cash flow crunch it experienced since the lockdown began and will be settled when its financial situation improves.

The SA Post Office (SAPO) says that the non-payment of workers statutory benefits such as medical aid and pension fund contributions to the right bodies was a result of a " a dramatic decline" in its revenue during the lockdown which necessitated it to prioritise employees' salaries over these benefits.

This comes as SAPO workers are planning to down tools on Wednesday over concerns that their medical aid and retirement benefits which were deducted from their payslips but not paid to administrators might have been misappropriated by the parastatal.

The Communication Workers Union (CWU) gave the industrial action notice to SAPO on Friday saying that the strike will commence on 14 October. CWU general secretary Aubrey Tshabalala said SAPO has violated a number its obligations to workers as stated on their employment contracts.

These include the non-payment of statutory benefits like medical aid and retirement contributions as well as failure to implement a 6.5% salary increase the parties had agreed would come into effect in April.

Funds misappropriated?

"We note that there are new people that just came in as acting now and have found Post Office in this crisis it is at. But we are saying that heads must roll because workers' payslips show that all the deductions were made. We are saying there is misappropriation of funds," said Tshabalala.

Tshabalala said workers also want SAPO management to account for the R2.9 billion that was given to it by National Treasury in the 2018 Medium Term Budget. SAPO received that allocation in January 2019 and said at the time that it would be used partly to settle all long-term loans, pay critical suppliers and to fund future capital expenditure. But last month, Treasury said SAPO was back asking for financial support again.

But SAPO SA acting CEO Reneilwe Langa said the company experienced a dramatic decline in revenue since the lockdown period and therefore took a decision was taken to prioritise salary payments whilst working on revenue recoveries towards settling statutory payments.

"The outstanding statutory payments which could not be paid due to the cash flow situation have been captured for accounting purposes on the salaries bill. This is in order to ensure that the outstanding amounts can be settled by the Post Office when the financial situation improves or funding is received," said Langa.

Langa added that SAPO is engaging with relevant service providers on this issue and will keep employees informed of the outcome of the engagements during the week.

On Friday, MEDiPOS Medical Scheme, which provides medical aid to SAPO employees, wrote to the state-owned entity (SOE) and warned that it would stop providing cover if arrear medical aid contributions were not paid by 31 December.

The letter said R213.3 million in contributions were outstanding from  April 2020 to 30 September 2020. MEDiPOS principal officer Thabisiwe Mlotshwa also wrote that the scheme continued to pay SAPO staff claims during that period but it could not continue doing so indefinitely and that its failure to collect premiums timeously was creating trouble for MEDiPOS with the regulator, the Council for Medical Schemes.

"While, the scheme has made several attempts to engage with SAPO on this matter, and will continue to do so, as matters currently stand, there is no firm undertaking on the part of SAPO to make arrangements to pay the arrear contributions, as well as any contributions going forward," Mlotshwa wrote in the letter.

Deliberate attempt to destroy SAPO

Tshabalala said the union also wanted to address the long-standing mismanagement of SAPO with the planned industrial action.

He said workers proposed the modernising of SAPO more than a decade ago but the lack of political will debilitated the company to a point that it was at risk of a "collapse like SAA".

"What [Danish courier company] DSV is doing today by putting machines at all garage forecourts, those are the things we proposed way back in 2007. Noting that the Post Office has footprint all around the country and all these other post and courier services don't, it shows that there is a concerted effort to destroy the SOE deliberately," he said.

CWU said its next plan of action was to march to government departments, including the National Treasury, which uses private sector players for courier needs.

He said the government also needed to address the fact that SAPO's prices were regulated while competing in an open market with private players who can move goods much faster because they charge more.

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