South African telecommunications services provider Telkom has confirmed that there will be no forced retrenchments for the next two years, that outsourcing will be limited to less than 1,000 employees over this period, and there will be an increase of 6% on basic salary payable from 1 April 2017.

In addition to the introduction of Performance Pays as a replacement to the previous Short Term incentive plan, these are the terms of a Collaborative Partnership Agreement (CPA) reached between the telco, and organised labour represented by the South African Communications Union and Solidarity, effective from 1 June 2016.

The unions, excluding Communications Workers Union (CWU), have agreed to fully support the Performance Pay incentive plan, to ongoing support and involvement of creating more flexible working practices and patterns, and improving the operating model between organised labour and Telkom.

The two-year CPA was signed in Johannesburg today and, according to Telkom, will facilitate the introduction of widespread performance-based remuneration for individuals and teams.

In its announcement Telkom SA said CWU has agreed to the deal in principle, but there is a legacy issue that remains unresolved and is currently in arbitration.

The agreement covers Telkom's 11000 unionised employees, but excludes employees in Telkom subsidiaries including Business connexion and Trudon.

The company currently has approximately 12 500 employees.

Turnaround strategy

The agreement with unions has been brokered in the same week the telco declared its three year turnaround strategy a success, and said it had reduced company employee expenses by 10%.

CEO Sipho Maseko said that the company's culture shaping programme is underway and that it will continue to invest in training and skills development. "The past three years have been hard on our people but with the turnaround behind us, we must look to the future with confidence. This agreement with organised labour is the result of many months of hard negotiations and extensive consultation. The open and transparent approach of organised labour has helped us achieve this important milestone. Together, we are now in a position to regularly reward employees who have the right attitude and who truly extend themselves, to always put the customer first."

Telkom is not offering any employee an annual increase this year, but has offered the opportunity to earn up to 12% more each month, should they meet and exceed sales and customer service targets.

Union representatives could not be reached for comment at the time of publishing.