Standoff as MTN employees reject retrenchment package

Telecoms workers are set to pay the ultimate price as companies transform their operating models in search of higher efficiency at the lowest cost possible.

This shift is premised on outsourcing, which reduces the companies’ wage bill and other benefits. 

The latest victim’ of this shift are 143 workers at MTN, whose “employment strategy is profoundly based on a thin staff supported by outsourcing of labour and services to reduce costs.” 

The affected employees, of the network group mainly work in the operations and radio planning departments.

Over the next three months, some of them will be out of work altogether while others will move over to a different management.

This follows the decision by the MTN Group, which owns Uganda’s leading telecoms, to contract Chinese telecommunication equipment manufacturer and services vendor ZTE to operate and maintain its network and other related services.

The move is part of a new model the group is implementing across its operations in 21 African and Middle Eastern countries.

Its main objective is to “improve operational efficiency, delivery of better network quality and leverage on cost of operations,” according to a March 30 internal memo from the company’s chief executive officer. 

Already, the model has been implemented in Nigeria, Ghana, Cameroon, Sudan, South Sudan, Guinea Conakry, Zambia, Afghanistan, Cyprus and Zambia.

The company’s executive management and the workers have disagreed over the terms of transition, which threatens the performance of its services, at least in the short run.

Sources said on May 19 the workers laid down their tools for at least eight hours in protest over the calculation of severance pay.

Management reportedly pleaded for two-day grace to consult head office before they could communicate a definitive position about this demand — one out of 13 that has so far emerged as major sticking points in negotiations where quick deals are least expected.

Other key demands include accrued leave, unpaid wages and overtime, contributions to the provident fund, company shares, repatriation costs, and a certificate of good service.

Because employment laws in Uganda do not state in absolute terms how much employees who do not consent to their transfer or lay off should be compensated, the MTN network staff initially asked for at least three months’ pay per year worked — a period that has become a standard in such labour negotiations.

Sources at MTN said management rejected the proposal, arguing it was aimed to benefit the long-serving workers. Yet, when the demand was revised to between 11 and 14 weeks for the longest and shortest serving workers respectively, MTN reportedly rejected it because it still favoured those with a fewer years of service.

The company, according to sources, prefers to pay only two weeks per year as stated in its policy, which workers have rejected.

However, on Friday, the company said: “All statutory, contractual and terminal benefits will be paid with a full guarantee of immediate re-employment.”

Dr John-Jean Barya, who is representing the workers, said his clients do not intend to back down because their demands are within the law.

“What they are asking for is not all that much, in my view, not something a company like MTN cannot afford. They have already revised it down and they say they are not willing to go any lower than that,” said Dr Barya, a labour law expert.

Experts said outsourcing has become the most efficient way of handling labour relations particularly because current labour laws do not quite apply to outsourced companies. 

As such, they, too, take advantage of the unemployment bulge in the country to offer “take it or leave it” terms, which are often “appalling, dehumanising and despicable,” said an expert.

“There are perfect companies that stick by the law and there are companies down the chain that do not go by the right regulations. Overtime they will clean up,” Badru Ntege, who chairs the sector’s association, once told The EastAfrican.