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South African fixed-line telecoms operator Telkom said on Wednesday its restructuring plans would be temporarily delayed after a labour court referred its dispute with unions to an independent commission.
Judge David Gush said Telkom should halt its plan to cut 4,400 jobs until the company’s negotiations with unions was concluded at the Commission for Conciliation, Mediation & Arbitration, a labour dispute resolution body.
Telkom, in which the government owns a stake of about 40 percent, is in the middle of a turnaround plan that aims to bring down costs and better compete with wireless operators MTN Group and Vodacom. “While the judgment is disappointing, this is a temporary delay in the company’s turnaround strategy,” Telkom said in a statement. “To secure the future sustainability of the organisation, Telkom has to change the way it works and how it is structured.”
Three labour unions had taken Telkom to court, arguing that workers had not been consulted adequately about the restructuring process – something Telkom has denied.
“The court ruling is a huge victory for us, because it gives us an opportunity to participate in the process,” Solidarity Deputy General Secretary Johan Kruger told Reuters. “There is a possibility that there will eventually be job losses but by being able to participate in the process, we can try and save jobs.”
Telkom employs about 18,000 people.
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