Employees, communities brace for worst as SA Post Office on brink of liquidation

‘I’m terrified at the prospect of losing my job, but more so at the prospect of losing my benefits if the company is liquidated,” an employee at the SA Post Office’s Chiawelo, Soweto, branch — who requested anonymity — told Daily Maverick. 

In consultation with the Commission for Conciliation, Mediation and Arbitration, 4,875 SA Post Office workers were retrenched through a section 189 process after the entity entered business rescue in July 2023.

South African Postal Workers Union (Sapwu) general secretary, David Mangena, said, “Employees who survived the section 189 [process] are worried that should the Post Office find itself in liquidation, they will lose all their benefits and will be worse off than those that have been retrenched.”

“I am keeping my lawyers on speed dial. It’s all too soon and confusing,” said a retrenched employee who had been based at the Protea Gardens Post Office.

The spokesperson for the SA Post Office, Louise Brugman, said, “We have been quite honest and transparent when it comes to the retrenchments and packages. There was a lot of communication going out.”

Read more: SA Post Office business rescue practitioners ask Treasury for R3.8bn bailout

While some employees and former employees are frustrated with the intricate business rescue process, others believe more could have been done to save the retrenched employees’ jobs.

The 4,875 retrenched employees constituted 43% of the SA Post Office’s workforce of 11,083 before the business rescue process began.

The first tranche of retrenchment packages was paid in June and the second tranche on 28 August. The final tranche will be paid in November. 

The business rescue practitioners have asked the Treasury for a R3.8-billion bailout to keep the SA Post Office afloat, in addition to the R12.7-billion in bailouts it has received over the past nine years. 

Last week, business rescue practitioners Anoosh Rooplal and Juanito Damons updated Parliament on operational changes, successes, risks and possible mitigation tactics, as well as the envisaged future of the Post Office should additional funding not be procured.

They warned that if the Treasury did not agree to the funding, it could force the entity into liquidation.

The existence of the SA Post Office was threatened mainly by a failure to evaluate its services and adapt. Globally, post offices have shifted towards digital and e-commerce solutions after physical mail declined.

The financial crisis has led to the closure of 366 SA Post Office (Sapo) branches under the business rescue process. The business rescue practitioners envisage keeping open 657 branches.

“Our members are in panic mode and not prepared to lose their jobs,” said Mangena.

“We are meeting with the Post Office [on Wednesday] on the status of retrenchment so that we can get an understanding of what is currently happening with the ongoing low-scale retrenchments.”

Brugman said, “For us, the focus is not the ‘day zero’ [liquidation], but we are focusing on what we are currently doing to improve the state of Sapo. At the moment, the business is looking to generate and protect revenue where it can.”

Community anger