Post Office on a knife edge
Parastatal is struggling to put on a brave face as workers’ strike enters fifth week, with no end in sight
e just don’t know what’s going to happen to this place,” a frustrated SA Post Office employee told City Press, summing up the view of many stakeholders as the debacle at the institution unfolds.
With a strike entering its fifth week, the CEO placed on special extended leave and continued speculation about huge losses and wasteful expenditure, the parastatal is on a knife edge.
An internal memo sent to staff last week said group CEO Chris Hlekane had “decided” to go on extended leave, and the group executive for the mail business, Janras Kotsi, has apparently been suspended. This was confirmed by Post Office spokesperson Lungile Lose, but he declined to provide further details.
Financially, thingshavebeengoingsouthforyears, with its woes exacerbated by labour unrest and management issues. In 2005, profit before tax was R943 million. This dropped to a pre-tax loss of R206 million last year.
There is speculation that the timing of Hlekane’s special leave coincides with the parastatal’s long-awaited annual report, which is moving slowly through the parliamentary process.
According to numbers provided to Parliament’s portfolio committee, the Post Office’s overdraft increased from R233 million in June to R353 million in August.
In an internal email from the chief financial officer to staff titled Touching Base, the Post Office disputes the numbers reported recently in The Star newspaper, including R2.1 billion in irregular expenditure.
According to the email, wasteful expenditure incurred in the 2013/14 financial year was actually only R2 million, while irregular expenditure was R71 million.
There has also been an issue regarding the company’s pension fund, and employees have accused the Post Office of misusing R401 million of their pension fund money.
Employee salaries were not paid on time last month. This was attributed to a technical glitch, but it gave rise to concerns about the Post Office’s financial situation.
The mail business has been declining – not only because people are using more advanced technology to communicate, but because companies like PostNet are able to offer a more reliable service.
The situation is outlined in a Communication Workers Union email reflecting a meeting of the National Bargaining Council on August 20. In the email, it was recorded that Hlekane (who is not named in the email but simply referred to as CEO) arrived suddenly and made a presentation on some of the biggest challenges facing the Post Office. These include: A continuous decline of mail distribution; The Courier freight group is bleeding financially and its survival is dependent on the SA Post Office;
The failure to secure R3.5 billion from the Treasury for corporatisation;
Trying to reverse costly decisions like paying rent when the company could use its own building;
The withdrawal of a subsidy by government but still being expected to honour its universal service obligation; Continuous strikes; and Key business partners, like Unisa, pulling out of their contracts because of instability.
Intheemail, theunionalsosaiditwasexertingpressure on government to patronise the parastatal.
“We were reliably informed SA Post Office will partner with digital terrestrial TV to deliver the set-top boxes to customers before the digital migration comes into place,” it said. “However, this will be just a test to see if it can deliver what it takes before they can bid for other government business.”
As the strike enters its fifth week, the DA has called the Post Office out for being economical only with the truth when it comes to how many casual workers it employed on a permanent basis.
The strike is a reaction to the slow progress of converting casual workers to permanent employment, a process the organisation committed to last year.
The Post Office has said that since the process began, more than 2 600 casual employees have been given permanent contracts and a further 900 contracts are being processed.
But DA MP Cameron MacKenzie, who sits on the portfolio committee of the telecommunications and postal services department, said this is in contrast with what the Post Office has presented to Parliament.
“I asked the Post Office the question in Parliament and the answer I got was the following: on August 1 2014, 7 556 workers were still employed on a casual basis, and on February 19 2014, in a report to Parliament’s portfolio committee, the Post Office had 7 911 casual workers employed.
“So in the 12 months since the commitment was made, only 355 people have been permanently employed – that’s 17 people a month,” MacKenzie said.
“This points to gross inefficiency and a lack of will on the part of the Post Office management to actually honour their obligation to these workers. Now that’s why the workers are on strike.”
Post Office spokesperson Johan Kruger said the discrepancy could be that employees were given permanent positions but on a part-time basis.