The plan by the cash-strapped SA Post Office (Sapo) to downsize its workforce by slashing 6,000 jobs will not affect the Postbank, which is eager for a full banking licence, paving the way for it to become the state-owned bank.
Postbank, which has been operating under technically insolvent Sapo, is a separate company and is not involved in discussions between unions and the employer regarding looming retrenchments at the state-owned postal services, according to Sapo spokesperson Johan Kruger.
Separation is necessary for Postbank to get a full banking licence from the Reserve Bank. The Post Office is not in a sound enough financial position to meet requirements for registration as a bank-controlling company in terms of the Banks Act.
Postbank operates on limited conditions including providing various banking services for the unbanked. However, it is unable to provide the full range of banking services, including credit facilities, until it is granted a full banking licence. The company is also used by millions of social grant beneficiaries to withdraw their funds from ATMs and retailers.
The Section 189 notice, issued to Sapo employees after President Cyril Ramaphosa’s state of the nation address last week could affect service delivery to rural and poor communities, the Communications Workers Union (CWU) says.
“They [Sapo management] gave us a notice on Thursday saying they want to retrench 6,000 workers nationally,” CWU general secretary Aubrey Tshabalala told Business Day on Monday.
The commission for conciliation, mediation and arbitration [CCMA] “is going to run the process. The CCMA has to give us a date when we will meet,” Tshabalala said.
“We don’t think this is a sober plan,” he said, noting that services to rural areas would be affected if the retrenchment process went ahead. He said the CWU represents about 6,500 of the post office’s workforce of about 16,000.
The Sapo management was expected to explain the rationale behind the planned job cuts and affected departments and employees, among others. Kruger told Business Day: “No decision has been taken and the matter is in a consultation stage.”
The technically insolvent Sapo, meant to be a main medium of communication, especially in rural and remote areas, is among a long list of SOEs reliant on government bailouts to keep operating. It has been pushing for a R1.6bn bailout before end-March 2023 to meet its cash-flow deficit and R2.4bn more to roll out its new turnaround strategy.
In its annual report tabled in parliament in October 2022, Sapo said it incurred losses of at least R2.2bn (down from about R3bn the year before) and its liabilities exceeded total assets by more than R4bn. It could not pay debts when they fell due. It received a disclaimer from the auditor-general, the worst possible audit outcome.
The report also notes that during the period under review Sapo managed to deliver only 68% of mail and operated with a fleet of 366 vehicles, down from 1,236.
In November 2022 the chair of parliament’s communications & digital technologies portfolio committee, Boyce Maneli, urged the government to allocate funds to the Post Office, saying the decision not to allocate funding to the state-owned enterprise (SOE) in the medium-term budget policy statement tabled in October was “erroneous” and could be catastrophic to service delivery.
The proposed plan to retrench workers at Sapo has been condemned by the DA and the EFF.
The DA shadow minister of communications, Dianne Kohler Barnard, said the potential job cuts would have an effect on the collection of social grants and parcels. She said the party would report Sapo to the department of employment & labour, the CCMA and the public protector.
“The way in which staff have been treated at the Post Office is beyond unfair. Their contributions for medical aid, pension and the like are appropriated by management so they have lost all benefits, and now we hear the news of the layoffs. A full Hawks investigation into this misappropriation of funds is under way at our request,” Kohler Barnard said.
The EFF said the Post Office’s failure to modernise and compete with private sector courier services and emerging technologies was at the centre of its financial woes.
“The EFF is opposed to a jobs bloodbath as a solution to rescuing SOEs. If there is any interest in resolving the financial challenges confronting Sapo, then there needs to be a comprehensive strategy to modernise and compete with emerging entities in the courier and postal services industry.”
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