6 000 employees face the axe as SA Post Office’s rescue plan is approved

The Business Rescue Plan to restructure the SA Post Office has been approved and will see the reduction of the branch network to about 600 branches that will be staffed by about 5 000 employees in the country.

According to unions, this could see 6 000 employees being retrenched.

This is according to a statement released on Thursday by Joint Business Rescue Practitioners of the Post Office, Anoosh Rooplal and Juanito Damons.

The practitioners said they were pleased that their plan was voted for by the majority of creditors during a meeting last week.

Rooplal said they believed that their strategy could restructure the Post Office into a future-proofed business that could provide inclusive communications for all. He said the entity fulfilled an important social mandate intended to provide key basic communications services to all households, including in the rural areas, where access to wi-fi, smartphones and printers are not a given.

“A restructured Post Office can do this affordably and conveniently, given certain regulatory pricing and geographic reach of the branch network,” he said, adding that it would also contribute to the financial sustainability of many large and smaller businesses due to its many procurement activities.

The plan will be adopted in two phases over a two- to five-year period.

Phase 1 includes reducing the number of branches and employees to stabilise the business, while Phase 2 will implement elements of the Post Office of Tomorrow strategy.

The SA Federation of Trade Unions (Saftu) and its affiliate, the Democratic Postal and Communications Union, said the retrenchments would leave workers destitute and in poverty, especially in the context of the rising cost of living and elevated household debts.

Saftu general secretary Zwelinzima Vavi said the unions were disappointed by the approval of the rescue plan.

Vavi said the restructuring plans have, among others, identified the “staff costs” as the “highest cost drivers” that far exceeded its revenues.

“This plan to retrench about 6 000 workers was proposed early this year, and is part of a medium-term plan to down-size the Post Office headcount from over 16 000 in 2020,” he said.

He said the retrenchments would lead to under-staffing at branches.

“This leads to customer dissatisfaction. In other instances, it accompanies branch closures. But branch closures alone mean the revenue generation streams are minimising, which contributes to further economic losses,” said Vavi. The Communication Workers Union (CWU), which could not be reached on Sunday, told The Mercury’s sister newspaper The Star earlier this year that the Post Office had failed to adhere to its own processes where such matters should or could be discussed at the bargaining chamber with all key stakeholders.

Instead, the CWU said the entity dropped a bombshell announcing its plan to retrench the bulk of its workers after a Section 189 notice.

DA spokesperson for communications and digital technologies Natasha Mazzone said the plan set out to retrench 6 000 workers and close about 420 branches across the country.

“These interventions will worsen our unemployment crisis, as well as worsen circumstances for the vulnerable that rely on the Post Office. In addition to providing postal services, Sassa (SA Social Security Agency) beneficiaries collect social grants from the Post Office,” she said.

She said beneficiaries in rural communities already travelled long distances out of their own pockets due to branch closures, adding that further branch closures would make commutes completely unaffordable The UDM’s deputy president, Nqabayomzi Kwankwa, said the government’s endorsement of a plan that will leave 6 000 employees jobless was just another case of ordinary workers paying for the ANC government’s mismanagement of state-owned enterprises (SOEs).

“Workers are retrenched from SOEs with the justification that a reduction in the salary bill will improve their financial situations, yet they remain in the same precarious positions despite the retrenchments. It is not the salary bill that is the problem, it is the financial mismanagement.”

The Mercury