Telkom has agreed with organised labour not to retrench any workers for the next two years, but in turn workers have agreed to a wage freeze and to a new performance-based system that can earn them extra money.

The agreement has been signed between Telkom and two of the three recognised unions within the company, namely the South African Communications Union and Solidarity, and is effective immediately.

The Communications Workers Union (CWU) has agreed to the new partnership agreement in principle, Telkom said on Tuesday. “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 company said the agreement covers Telkom’s 11 000 unionised employees, but does not include employees in Telkom subsidiaries such as Business Connexion and Trudon.

“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 CEO Sipho Maseko in a statement.

“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,” he said.

Telkom will now “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 company said.

Under the agreement, Telkom will not retrench anyone for the next two years and outsourcing will be limited to less than a thousand employees over the same time period.

The introduction of a new variable incentive plan, known as “performance pays”, 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 … with further upside for over-achieving employees.”

The unions have committed to full support in the implementation of the new incentive plan as well as 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, the company said.