News : Court Judgment May Cost MTN Dearly
Johannesburg, South Africa, May 11 2015 -- A judgement against MTN SA may cost it tens of millions of rand in back pay for call centre staff it dismissed five years ago.
Last month the Labour Appeal Court ruled in favour of the Communication Workers Union (CWU) on behalf of 47 staffers that were dismissed in 2010 when MTN had moved in-house a call centre in Durban that it had outsourced in 2006.
Judges Dennis Davis, Baheer Waglay and Simon Ndlovu found the business had been transferred as a going concern and ordered the reinstatements and MTN to pay legal costs. CWU general-secretary Aubrey Tshabalala last week described the legal costs as a "massive amount". The union was assessing these, and was awaiting feedback from MTN on the back pay, he said.
"We are still looking at the cost implications as it is from the time of dismissal. The other part is the cost of the lawyers. But it is a massive amount," he said.
MTN’s comment was not obtained by the time of going to press.
In June 2010 MTN had told Interaction Call Centre that it would end its agreement and "internalise" the call centre operations from December that year but retained some of the staff, including managers, while retrenching the 47. The judgment said the dismissed employees were "in law" employees of MTN effective from December 1 2010 with no loss of service.
The battle once again highlighted the contentious section 197 of the Labour Relations Act, which governs the transfer of a business. The act stipulates that staff could not be retrenched should a business be transferred as a going concern, which is generally determined by the degree to which it remained the same, for instance on staff and asset retention, or continuation of an operational or business model.
The CWU had argued that the business had effectively been transferred as a going concern as MTN had kept staff and the centre’s operational model.
Posted by Veronica Silva Cusi, news correspondent
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MTN Nigeria is part of the MTN Group, one of Africa’s cellular telecommunications company.
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