Through its Business Rescue Plan, the South African Post Office (Sapo) has issued approximately 4,700 termination letters to employees affected by its retrenchments.
It has also identified 657 branches within its network that will remain. It started shuttering the branches identified for closure at the end of June 2024.
“In this regard, we have notified the respective landlords of the 657 branches to be retained,” its Business Rescue Practitioners (BRPs) said.
Regarding the retrenchments at Sapo, all affected employees’ notice period ended on 30 April 2024. The first tranche of retrenchment packages was paid at the end of June.
However, the BRPs are now trying to fill some of the positions vacated through the retrenchment process.
“The BRPs are, however, in the process of conducting job interviews to fill necessary and key positions which were affected by the retrenchments,” they said.
MyBroadband asked the Post Office for further details about the branches set to be closed and why it is replacing some of its retrenched staff, but it hadn’t answered our questions by publication.
Sapo has been underperforming for many years and was declared officially insolvent by BRPs Anoosh Rooplal and Juanito Damons in July 2023.
The pair also revealed that the Post Office’s liabilities had increased to R12.5 billion, which it said dwarfs Sapo’s asset base.
Rooplal and Damons said the state-owned entity must improve revenue and implement an effective and efficient cost structure to become factually solvent.
The pair developed a Business Rescue Plan for Sapo, which its creditors approved in December 2023, which includes restructuring the Post Office to ensure that it can fulfil its mandate.
“The Post Office fulfils an important social mandate intended to provide key basic communications services to all households, including the rural areas, where access to Wi-Fi, smartphones and printers are not a given,” said Rooplal.
He added that a restructured Post Office can do this affordably and conveniently.
The Business Rescue Plan included thousands of job cuts, which have now been completed despite the BRPs developing a last-minute plan to avoid job losses.
The Post Office reached an agreement with labour groups to halt the retrenchment while they attempted to secure funding from the Temporary Employment Relief Scheme (TERS).
After discussions with unions, Sapo filed an application with the Commission for Conciliation, Mediation & Arbitration (CCMA) to delay the staff cuts.
However, the CCMA was unconvinced and noted that TERS had been relaunched following the Covid-19 pandemic to relieve employers’ financial distress.
It said that, in Sapo’s case, TERS funding would merely delay the inevitable. Therefore, the plan failed, and the BRPs were forced to proceed with the job cuts.
Rooplal said the Post Office had approached the CCMA to limit the impact of retrenchments and provide temporary relief for the bargaining unit.
He added that had the application been successful, the BRPs believe it would have led to a better outcome for affected employees and their dependents, even if only for a short period.
However, they managed to reduce the impact of the retrenchments significantly. The BRPs initially planned to reduce Sapo’s headcount to around 5,000 employees from just over 11,000 but managed to terminate only 4,700 staff contracts.
The job cuts and branch closures fall under phase one of the BRPs’ Business Rescue Plan. The second phase will see the “Post Office of Tomorrow” strategy launch, which hopes to meet the outcomes of the Postal Amendment Bill.
This includes offering diversified and expanded services through hybrid mail extensions, new vehicle licence disc renewal solutions, and creating a digital hub.
South Africa’s new minister of communications and digital technologies, Solly Malatsi, has identified the Post Office as requiring close attention from his portfolio.
The minister believes opening the Post Office to public-private partnerships would ensure its financial stability in a highly competitive market.