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    TKG   ZAE000044897

TELKOM SA SOC LIMITED

(TKG)
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End-of-day quote. End-of-day quote Johannesburg Stock Exchange - 09/23
44.07 ZAR   -0.56%
09/23Telkom Openserve Reportedly to Get JSE Listing
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Telkom SOC : "Promotions" In The Context Of Retrenchment Proceedings

08/31/2020 | 04:11am EDT

The South African Labour Court, in Telkom SA Ltd v Commission for Conciliation, Mediation & Arbitration & Others, had to determine whether a failure by Telkom to appoint an employee into a more senior position within the context of a restructuring process amounted to an unfair labour practice concerning promotion in terms of the Labour Relations Act, 1995.

In 2016, Telkom embarked on a restructuring process that resulted in 40 employees facing retrenchment. However, there were two vacant positions in the new organisational structure. Telkom advertised these positions within the new structure and the employees that were facing retrenchment were invited to apply for these positions. This was seen as a possible method of limiting the number of employees who would be retrenched. The employee in question, Mr Sithembiso Gcaba, unsuccessfully applied for the position of senior specialist: industrial relations and was then retrenched. Potentially, he could have argued that his dismissal was unfair because:

  • he should have been appointed to the position and was thus unfairly selected for retrenchment; or
  • there had been an alternative to his dismissal that should have been invoked.

He, however, took a different approach. He referred an unfair labour practice dispute to the Commission for Conciliation, Mediation and Arbitration ("CCMA"). He argued that if he had been appointed to the new post, this would have constituted a promotion and that the failure to appoint him constituted an unfair labour practice relating to promotion.

CCMA proceedings

By the time the dispute was arbitrated by the CCMA, Mr Gcaba had already been retrenched. The Commissioner stated that he was faced with a "hybrid situation" in that, while the process bore elements of the section 189 process, it also exhibited some elements of an unfair labour practice dispute relating to promotion. The Commissioner found that Telkom was guilty of an unfair labour practice for failing to promote Mr Gcaba into the position of senior specialist: industrial relations.

Labour Court proceedings

On review, the crux of this matter before the Labour Court was

  • whether the CCMA had jurisdiction to make a ruling on a matter of an alleged unfair labour practice that arose within the context of a restructuring process; and
  • most importantly, whether the employer's failure to appoint an employee in a more senior position during a restructuring amounted to an unfair labour practice relating to promotion.

The Labour Court rejected Telkom's submission on jurisdiction and held that the Commissioner's ruling insofar as jurisdiction is concerned was unassailable. The court then addressed the second question, and held that it is inconceivable that a selection criterion applied to fill a position could be conflated with a selection criterion utilised to determine who should be retrenched during a restructuring process. In particular, the court stated the following:

[14] "Unfortunately, this submission is flawed. To my mind, it is inconceivable that in a restructuring process the affected employees would harbour an expectation for promotion as opposed to being placed in alternative positions available, whether senior or junior in status or rank. A disputed failure to appoint an applicant to a different position, even though of a higher status, will not necessarily be classified as a dispute concerning promotion."

The review application was upheld. But the court did point out that Mr Gcaba had a remedy. Although he may not have been entitled to cast the dispute as one relating to promotion and therefore allege an unfair labour practice dispute, he could nevertheless argue that his dismissal was unfair. Indeed, he had already referred such a dispute to the Labour Court.

Reviewed by Peter le Roux, an Executive in ENSafrica's employment department

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Ms Naa'ilah Abader
ENSafrica
150 West Street
Sandton
Johannesburg
SOUTH AFRICA
Tel: 11269 7600
Fax: 10596 6176
E-mail: atim@ensafrica.com
URL: www.ENSafrica.com

© Mondaq Ltd, 2020 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source Business Briefing

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Financials
Sales 2022 44 571 M 2 980 M 2 980 M
Net income 2022 2 781 M 186 M 186 M
Net Debt 2022 10 855 M 726 M 726 M
P/E ratio 2022 8,21x
Yield 2022 -
Capitalization 21 818 M 1 456 M 1 459 M
EV / Sales 2022 0,73x
EV / Sales 2023 0,67x
Nbr of Employees 12 039
Free-Float 56,3%
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Sipho Nkosinathi Maseko Group Chief Executive Officer & Executive Director
Dirk Johannes Reyneke Group Chief Financial Officer & Executive Director
Matthews Sello Moloko Chairman
Althon Beukes Group Chief Information Officer
Deon Jeftha Fredericks Chief Investment Officer
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