September 11, 2008

Unions may strike against Telkom outsourcing

TELKOM's dramatic plan to outsource the running of its core networks has provoked a backlash from two unions, which may strike to keep the annual R4,8bn task of running the networks in-house. The Communication Workers' Union (CWU) and the South African Communications Union are deciding whether to strike or seek an interdict to halt the outsourcing unless managers agree to hear their proposals. CWU national treasurer Richard Poulton said the unions had declared a dispute against Telkom's unilateral restructuring. The CWU represents more than 65% of the workforce, and it is angry that Solidarity, with 10% of the staff, largely backs the outsourcing plan.
Telkom is assessing proposals by local and global companies eager to manage and maintain its network infrastructure. It believes outsourcing to a more experienced operator, a telecoms equipment supplier or a systems integrator, could save about R1,3bn a year and boost service quality levels up to 15%. Poulton said Telkom had rushed to identify potential bidders to take over its networking operations and information technology division without adequate consultation. Unions were "shocked" that Telkom had already issued requests for proposals to short-listed companies. "We cannot understand why the company wants to outsource, and why at such an incredibly fast pace. We are dealing with the future of more than 18.000 workers and their families," Poulton said.
One insider fears the motive is purely political, driven by managers anxious to protect their jobs. Mvelaphanda investment house and Nigeria's Globacom are negotiating to buy Telkom. But if the managers outsource most of its business beforehand, Telkom may become a far less attractive target. That would avoid new owners appointing fresh managers. A change of government may also see new executives appointed, so outsourcing may be designed to protect existing heads.
The CWU partly supports that theory, saying: "We believe that the haste to outsource is linked to some people who have lost at Polokwane and want to secure their futures before April next year at the cost of workers and their families." The unions said they had not had a chance to present ideas on keeping Telkom profitable and cutting costs. Talks should look at areas of inefficiency, and assess if high costs had more to do with executive pay than worker inefficiency, Poulton said. Solidarity said it would support outsourcing as SA would gain a more efficient, cheaper-to-run telecoms infrastructure with operations outsourced. (Business Day, Johannesburg)

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