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Telkom Labor Union to Fight Company Over Plans to Cut Jobs

The South African Communications Union has told Telkom SA SOC Ltd. (TKG) it will fight the phone company’s plans to cut more than 2,600 management positions because it disagrees with how the decision was reached.

Africa’s biggest fixed-line phone company didn’t comply with the spirit of South Africa’s Labour Relations Act when it decided to fire employees before informing unions, SACU said in a letter to Telkom today. The company plans to target white, male employees as part of a round of job cuts to reduce costs.

“The employer is required to consult with their trade union representatives when retrenchments are contemplated, not once a decision to retrench has been made,” SACU said. “We were informed via a media statement release by the group chief executive officer in December 2013 of the intended retrenchments, this in itself makes it a substantively unfair process.”

Telkom spokeswoman Sinah Phochana said the company had received the letter and is unable to comment further as it’s in consultation with SACU.

The company, 40 percent owned by the South African government, is struggling to revive revenue growth as consumers migrate from fixed-line technology to data-enabled devices such as smartphones and tablets. The Pretoria-based company needs to cut its workforce of about 19,200 by almost a third over five years to remain financially viable, CEO Sipho Maseko told Bloomberg in December.

Telkom’s shares have gained 39 percent this year, the fourth-best performer on the FTSE/JSE Africa All-Share Index, and fell 2 percent to 38.80 rand by the market close in Johannesburg.

“We are therefore left with no other alternative but to place it on record that SACU is officially in dispute with the company on the intended process to retrench,” SACU said in the letter.

To contact the reporter on this story: Christopher Spillane in Johannesburg at cspillane3@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net John Bowker, Ana Monteiro

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