Telkom to pay employees nearly R5 million over 2017 wage agreement

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Telkom said that the 1 175 affected employees will be paid their outstanding money next month.
Telkom said that the 1 175 affected employees will be paid their outstanding money next month.
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  • A long-standing salary dispute between Telkom and trade union Solidarity has ended with a R4.6 million award for workers.
  • Several arbitration sessions took place between February 2020 and May 2021.
  • Solidarity hailed the arbitration award as a victory for employees.

A long-standing salary dispute between Telkom and union Solidarity has ended with a R4.6 million award for workers, following an arbitration settlement over its implementation.

On Monday, Solidarity said the award was based on the interpretation of a 6% salary increase agreement entered into with Telkom, which it believed the company had not implemented fairly. According to the union, the increase came into effect in April 2017.

"Telkom decided unilaterally to calculate the 6% increase on the 50th percentile of each individual’s functional area, and not on the total package of each individual employee as per the agreement," said Linda Senekal, the union’s spokesperson for the communication industry.

Solidarity said the matter had been unresolved since 2017. Telkom had taken the first award on revision, and the Labour Court had sent the matter for arbitration.

"After several tough arbitration sessions which took place between February 2020 and May 2021, Solidarity again won the case," said Senekal.

Solidarity described the latest award, which will put R4.6 million into the pockets of thousands of workers, as victory for a workforce battered by the effects of the Covid-19 pandemic.

"In terms of the award, Telkom must pay employees according to the provisions of the agreement as agreed upon in 2016, which means that the 6% salary increase must be granted based on the individual’s total package."

According to arbitration documents, Telkom argued that its remuneration policy was focused on the 50th percentile principle - in other words, using the median pay of each functional area as a reference point for salaries. The telecoms company also argued that although the agreement it had reached with workers in 2016 did not make reference to the 50th percentile, that detail should have been considered to be in place, since the philosophy was "embedded" in Telkom.

However, senior commissioner Richard Byrne said it was clear that the agreement referred to 6% increases and not the 50th percentile.

In a written response, Telkom said: "In light of the fact that this matter has been in dispute for a protracted length of time, and in the spirit of goodwill and progress on the matter, we have decided to honour the ruling."

The telecoms group added that the 1 175 affected employees will be paid their outstanding money next month.

Like other companies in the telecommunications sector, Telkom, which is 39% owned by the government, has received a major boost from an increased use of mobile networks during the lockdown. 

The company's annual financial results in May showed that its mobile business had grown to be the main contributor to group revenue, with service revenue having surged  34.5% to R16.9 billion and profit stood at R2.4 billion.

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