‘New’ Post Office will be affordable, convenient, BRPs vow

While business rescue practitioners (BRPs) for the Post Office have hailed the approval of its business rescue plan by creditors and the R3.8bn bailout this will unlock, organised labour warned that the branch closures and job cuts will make the entity a shell of its former self. 

The business rescue plan by joint BRPs Anoosh Rooplal and Juanito Damons was approved by the majority of creditors at a creditors’ meeting on Thursday.

Rooplal said the restructured Post Office will be able to provide postal, communications and technological services affordably and conveniently through regulatory pricing and the geographic reach of its national footprint.

“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,” he said.

While the Post Office has received recapitalisation of R2.4bn from the department of communications & digital technologies, the BRPs said it requires another R3.8bn as investment capital to repair and modernise its service.

They said a restructured Post Office can contribute to the financial sustainability of many large and smaller businesses, due to its procurement activities. It will also contribute to the taxpaying base, as well as increase employment again in the future, as the business grows.

This retrenchment will throw workers into destitution and poverty, especially in the context of the rising cost of living and elevated household debt

—  South African Federation of Trade Unions general secretary Zwelinzima Vavi

The plan’s three phases over five years include the reduction of the branch network to about 600, and the reduction of staff to about 5,000 employees. It will also include “upskilling”, as well as a modernisation and digitalisation transition.

Said Damons: “Customer centricity and supplying the correct tools of the trade to the staff will be a key and ongoing initiative to provide excellent service, win back market share and gain traction with new products.”

The plan also seeks to repurpose the Post Office through hybrid mail extensions, new motor licence disc solutions, increased property rental revenues or sales of owned property, and a digital hub for inclusive communications.

“Strategic partnerships will be included in the strategy to bolster capabilities and resources in logistics, operations and information technology. An example is the large depot network that is strategically located throughout South Africa,” the BRPs said in a statement. 

According to the business rescue plan, these interventions would save a large number of jobs compared with liquidation. The Post Office’s inability to continue trading and the risk of receiving no dividend through the liquidation process would endanger even more jobs.

“A liquidation or insolvency outcome for the company would be catastrophic for all stakeholders of the company as well as for South Africa. It would result in the loss of all jobs and a strong likelihood of all concurrent creditors receiving 4.08c [in the rand] in respect of their claims.

“In addition, the business will cease and the assets will lose their value and benefit that they have as opposed to when they are used in the ordinary course of business,” the plan said.

South African Federation of Trade Unions general secretary Zwelinzima Vavi said the federation and its affiliate, the Democratic Postal and Communications Union, are disappointed by the approval of the plan, which proposes the retrenchment of 6,000 workers.

“This retrenchment will throw workers into destitution and poverty, especially in the context of the rising cost of living and elevated household debt. This plan to retrench about 6,000 workers was proposed early this year and is part of a medium-term plan to downsize the Post Office headcount from more than 16,000 in 2020 to about 9,000 in 2024,” he said.

He expressed concern at the plan’s proposal to reduce branches, saying the Post Office had 2,486 access points in its branch network in 2013 but reduced this to 1,266. He said the culmination of the staff reduction from 26,000 in 2000 to 13,990 today would end with a staff headcount of just 9,000 or even fewer.