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Johannesburg – Telkom today announced the successful conclusion of a new two year Collaborative Partnership Agreement (CPA) with organised labour that allows the company to introduce widespread performance-based remuneration for both individuals and teams.

The agreement has been signed between Telkom and two of the three recognised unions within the company. The South African Communications Union (SACU) and Solidarity have signed the agreement, which is effective from 1 June 2016. The Communications Workers Union (CWU) has agreed to the new partnership agreement in principle. Currently one legacy matter, which is unrelated to the new partnership agreement, is in arbitration. Telkom looks forward to closing out this agreement with the CWU.

The agreement covers Telkom's 11000 unionised employees, out of a total head count of just over 13 500 at the end of March 2016, but does not include employees in Telkom subsidiaries, such as Business Connexion and Trudon. Currently, Telkom has around 12 500 employees.

"Our turnaround strategy has allowed us to stabilise the business. The next chapter of the Telkom story must be one of growth and growth requires us to be better at attracting and retaining customers," said Telkom Group CEO Sipho Maseko.

"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," Maseko said.

The Collaborative Partnership Agreement allows Telkom to incentivise individual and team performance. While Telkom will not be offering any employee an annual increase this year, the company is offering employees the opportunity to earn up to 12% more each month, should they meet and exceed sales and customer service targets.

The Collaborative Partnership Agreement also contains a number of commitments from Telkom:

• No forced retrenchments for the next two years.
• Outsourcing to be limited to less than 1,000 employees over the next two years.
• The introduction of a new variable incentive plan, known as "Performance Pays", which will replace the previous Short Term Incentive plan.
• Performance Pays will focus on customer satisfaction and front-line productivity metrics.
• An employee who is achieving their targets can expect to earn approximately 6% more than last year, under the Performance Pays scheme, with further upside for over-achieving employees.
• An increase of 6% on basic salary payable from 1 April 2017.

In return, Organised Labour have committed to the following:

• Full support in the implementation of the Performance Pays incentive plan.
• Ongoing support and involvement in creating more flexible working practices and patterns in all areas of the business, to allow Telkom to more clearly mirror customer needs.
• Improving the operating model between Organised Labour and Telkom, streamlining the processes and reducing the number of people involved.

Sipho Maseko, commenting on the agreement, said: "This agreement heralds a new and exciting chapter in our relationship with organised labour. It creates stability, sustainability and a new way of working which will benefit our employees and our customers. I am looking forward to working closely with organised labour in the future to improve working practices and employee engagement."