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

CityPress - - Business - MAMELLO MA­SOTE­sote@city­ FI­NAN­CIAL CHAOS

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.

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