1. Telkom SA (Ltd) and the aforementioned recognised Union agree to implement adjustments  

    and/or amendments to the existing conditions of service, salary and other substantive matters  

    as contained herein for employees in the bargaining unit.

2.   The adjustments and/or amendments are interrelated and constitute a package.

SECTION A : SALARY AND RELATED ITEMS

3.  LONG TERM AGREEMENT

3.1       the parties agree to a 3 years’ long term collective agreement on substantive matters which will take effect on 1 April 2003 and will remain in effect until 31 March 2006:

                    1 April 2003 to 31 March 2004

                    1 April 2004 to 31 March 2005

                    1 April 2005 to 31 March 2006

3.2      the ratio of performance increases to guaranteed salary increases will be withdrawn.

3.3      the agreed method of payment for the guaranteed salary increases shall be by way of fixed monetary amounts.  These fixed monetary amounts shall be based on the following average percentages:

 4.    GUARANTEED SALARY INCREASE

          with effect from 1 April 2003:

4.1       a fixed monetary amount increase (average of 9%) for all members of the union employed in the bargaining unit:

4.2       the fixed monetary amount increase will be applied to the total remuneration packages for grades 6 and 7 employees and to the basic salaries for grades 8 to 11 employees;

4.3       the fixed monetary amount referred to in paragraphs 4.1 to 4.2 above will be based on the 31 March 2003 remuneration of employees.

5.    PERFORMANCE (PDMS)

5.1     the results for the assessment period 1 April 2002 to 31 March 2003 (or part thereof), will be utilised as a link to gainsharing in paragraph 6 below.

5.2     performance assessments for the period 1 April 2003 onwards will be linked to gainsharing as described in paragraph 6 below as well as to the individual gainsharing pool as described in paragraph 7 below.

6.    GAINSHARING

6.1     gainsharing will be based on the achievement of financial and performance drivers set by management for each financial year;

6.2     the gainsharing amounts referred to in paragraphs 6.1 to 6.8 are based on the entire Company’s performance.

6.3     a single lump sum amount will be paid out to employees on 25 July of each year provided that the objectives referred to in 6.1 above are achieved by Telkom;

6.4     payment of the gainsharing amount will be based on 31 March audited results and

         subject to the approval of Telkom’s Board of Directors;

6.5     for the PDMS assessment period 1 April 2002 to 31 March 2003:

performers who receive a “1” performance rating or performers who do not have a performance (PDMS) contract will not participate in the gainsharing reward on 25 July 2003;

 

performers who receive a “2” performance rating will receive 50% of the payout on 25 July 2003;

 

performers who receive a “3”; “4”; “5” or “N” performance rating will receive the total payout (amount adjusted in terms of paragraph 6.3 above) on 25 July 2003.

6.6       for the PEP assessment period 1 April 2003 to 31 March 2004 (and later assessment periods):

performers who receive a “did not meet targets” performance rating or performers who do not 2004 or on 25 July 2005 or on 25 July 2006;

 

performers who receive a “met targets” or “exceeded targets” or a neutral performance rating will participate in the gainsharing reward on 25 July 2004 or on 25 July 2005 or on   25 July 2006;

6.7        the Company undertakes to convene the Company Forum to consult (with a view to reaching an agreement) with Organised Labour on the detail relating to the implementation of the PEP (or a similar system) plan, which will include aspects relating to the Training and Development of employees.

6.8       the fixed amount (100%) for gainsharing shall be:

 7.    INDIVIDUAL GAINSHARING POOL

7.1     the individual gainsharing pool is being established to reward exceptional performers;

7.2     in order to qualify to receive payment from the individual gainsharing pool, the performer must exceed the targets set out in the Performance Enhancement Process (PEP) plan;

7.3        the individual gainsharing amounts referred to in paragraphs 7.1 to 7.7 are based on the individual’s performance.

7.4       a single lump sum bonus will be paid out to qualifying performers for the 2004/05 and 2005/06 financial years;

7.5        an amount of R 20 million will be set aside for the individual gainsharing pool for the 2004/05 and 2005/06 financial years;

7.6         the individual gainsharing pool will be distributed on a per Service Organisation basis.

7.7        the individual gainsharing amounts referred to in paragraphs 7.1 to 7.6 above are only for employees who “exceed the targets”.

8.    MEDICAL AID

8.1       the cap on the employer contribution per member (M) category (M, M+1, M+2, M+3 or higher) will increase as per the table below:

9.    LEAVE

9.1     a common leave cycle will be implemented for all employees, commencing 1 January 2004.  The leave cycle for all leave types will be for a period of 12 months, except for the sick leave cycle, which will be for a period of 3 years.  The leave cycle will extend from 1 January until 31 December.

9.2     provision for half-day leave will be introduced as from 1 January 2004. Half-day leave will apply for vacation, sick, compassionate, child care and paternity leave.  An employee must work for half of the working day in order to qualify for the half-day leave benefit. For example, if an employee is required to work for 8 hours and 30 minutes (excluding the meal interval of 30 minutes which is unpaid), then the employee must work for 4 hours and 15 minutes in order to qualify for the half-day leave benefit. All leave is dependent on operational requirements and is by prior arrangement between promoter and performer.

9.3     the qualifying service requirements for maternity, adoption, childcare, paternity and compassionate leave are to be withdrawn as from 1 January 2004.

9.4     examination leave for continuous assessments will be provided from a pool of a

          maximum of 10 working days per academic year subject to the submission of an

          examination/assessment timetable from a recognised academic institution. This 

          alternative measure to the existing provisions for examination leave will be

          implemented as from 1 January 2004. 

9.5     employees will be required to take 18 working days vacation leave per cycle on a “use it or lose it” basis as from 1 January 2004.  These 18 working days will include the 15 compulsory working days, which is defined in terms of the Basic Conditions of Employment Act, number 75 of 1997, as amended.

9.6     “capping” of the active leave accumulation will be reduced to  25 working days on

          30 June 2004.  Employees who have leave credits in excess of 25 working

          days in their active leave account, will have such leave transferred to their

         “personal” account which will be “frozen” into a monetary value on 30 June 2004,

          based on their 31 December 2003 remuneration.  Thereafter, “capping” on the 25

          working days will be done on 30 June on an annual basis, however, no “freezing”

          into a monetary amount will take place and employees will forfeit leave in excess

          of the 25 working days cap.

9.7     leave encashment of the unused portion of annual vacation leave will be limited to a maximum of:

• 7 working days for the period 1 July 2003 to 31 December 2003 (excluding employees who have encashed more than 7 working days leave for the period 1 January 2003 to 30 June 2003);

• 6 working days for the period 1 January 2004 to 31 December 2004;

• 5 working days for the period 1 January 2005 to 31 December 2005; and,

• 4 working days for the period 1 January 2006 to 31 December 2006

NOTE: Employees may encash leave at the current maximum of 7; 11 or 13 working days (depending on years of service) until 30 June 2003 with payment being made on 25 July 2003.

9.8       leave encashment will be aligned to the calendar year (i.e.1 January to 31 December) as from 1 July 2003; however, encashment of the “frozen” monetary amount will remain unchanged.

9.9        the “active” leave accumulation (up to a maximum of 25 working days) will not be “frozen”.

10. EMERGENCY LOANS

10.1      the status quo provisions of the emergency loans (for serious illness and death) will remain.

10.2      documentary proof (certified copy of the medical or death certificate) must be submitted within 7 working days from the date of granting the loan.

10.3      if such documentary proof is not submitted within 7 working days, then the loan will incur interest at the current prime rate.

10.4      in the event that an employee requests a second or a subsequent loan at a later stage, having not provided the necessary documentary proof for the earlier loan, the Company will not assist such employees and will refuse to grant such subsequent emergency loans.

10.5      Date of implementation : 1 July 2003

11. OVERTIME

11.1   the maximum weekly overtime limit of 10 hours is to be increased to 15 hours per week.

11.2   the increased overtime limit will only apply for 2 months in any 12-month period.

11.3   Date of implementation : 1 July 2003.

12. HOUSING GUARANTEE

12.1   the guarantee amount will not be larger than the member’s share in the

         pension/retirement fund.

12.2   Date of implementation : 1 July 2003

13. RECOGNITION FOR HIGHER QUALIFICATIONS

13.1   the provision for recognition for higher qualifications will be withdrawn.

13.2   Date of implementation : 1 July 2003

14. COMMENCING SALARIES

14.1   the system of commencing salaries for Grade 10 technical officers will be withdrawn.

14.2   Date of implementation : 1 July 2003

15. PAY DAY FOR DECEMBER

15.1   the pay day for December will be 20 December, or the Friday preceding 20 December, should 20 December fall over a weekend.

15.2   Date of implementation : 1 July 2003

16. TELKOM PENSION FUND

16.1   Telkom, as the Principal employer, intends withdrawing from the Telkom Pension Fund.

16.2   the Company will engage organised labour at the Company Forum on this matter during the duration of this agreement.

17. GRADES

17.1   all grades referred to in this agreement will be aligned to reflect the applicable

         terminology and practise for the relevant period/s for the duration of this agreement.

17.2   this does not preclude the parties from exercising their rights in law in respect of this matter.

18. HIV/AIDS

18.1   the Company will engage organised labour at the Company Forum on this matter during the duration of this agreement.

19. AGENCY SHOP

19.1   the Company will engage organised labour at the Company Forum on this matter during the duration of this agreement in terms of the provisions of the Labour Relations Act, number 66 of 1995, as amended.

20. EXISTING CONDITIONS OF EMPLOYMENT

20.1  The existing conditions of service which are not addressed in this agreement will

        continue to apply.

21. IMPLEMENTATION

21.1   The representatives of both parties undertake to take all reasonable steps necessary to ensure the implementation of this agreement.

21.2   This agreement settles all demands and counter-demands made by both parties during the 27 March to 4 June 2003 negotiation period and is a full and final settlement which is legally binding on the parties. 

21.3    Neither party shall call for a strike or lock-out in respect of any demands related to salary increases or adjustments and/or other conditions of employment and benefits for the duration of this agreement.

21.4   There shall be no review of this collective agreement on substantive matters for

          the duration of this agreement unless in compliance with any labour legislation

          which may be introduced subsequent to the signing of this agreement.

21.5   The parties agree that there shall be no changes to the conditions of service for

         the duration of this agreement. In the event that any party desires to initiate any

         change/s then such proposed change/s will be subject to negotiations. Any

         agreed change/s will be reduced to writing and signed by both parties.

21.6   Nothing in this agreement precludes the parties from exercising their rights in law

         in respect of any issue contained in this agreement.

22. AMENDMENT

No amendment to this agreement shall be in force or effect unless reduced to writing and signed by both parties.

For TELKOM ___________________

(duly authorised representative)

For CWU ______________________  

(duly authorised representative)    

WITNESSES:

1.       ____________________        2.       ____________________

DATE:         6 June 2003

PLACE:       JOHANNESBURG