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Durban - Twenty radio mast engineers employed by MTN in Durban have won an arbitration court battle that allows them to keep their personal company cars and petrol cards, after the cellphone giant argued these should be taken away.
MTN had argued that the company would save money by ditching personal cars and petrol cards and pooling cars for the employees instead.
The resulting savings would be a boost for the company's shareholders, it argued.
Nationally, about 520 employees were affected by the decision.
The employees' attorney Dean Caro told News24 on Wednesday that, countrywide, four arbitrations by employees against MTN were instituted.
"MTN have lost three and settled one," he said. “Unfortunately only my clients in KwaZulu-Natal were allowed to keep the benefit pending the outcome of the arbitration process because we obtained an interdict. All the others handed their cars and cars back and had to litigate from a position of weakness."
“It is a resounding victory for the employees and a modern day equivalent of David vs Goliath,” he said.
Dragging on
The Durban arbitration took more than two years. Commissioner Lester Sullivan had strong words for the MTN, saying that it "chose to drag out this matter”. He ordered that it pay the employees' legal costs.
The employees, as part of their employment contracts, were all given cars and were entitled to take them home at night and over weekends. In December 2014 the company gave notice that, from April 2015, this would change. The cars would be “pooled” and could only be used for work.
Sullivan, in his written ruling, said company representatives had testified that MTN could no longer afford to give unlimited use of the vehicles. The financial prejudice to the employees would be offset by them not having to pay “perks tax”.
Senior MTN human resources manager Keagile Mati claimed “consultation” had taken place with employees, because two notices had been set out informing of the change in policy. He also insisted that the vehicles were “tools of the trade” and not a benefit.
However, he conceded that many managers across the country had allowed this “and they also were in breach of the policy”.
Head of MTN financial management Divyesh Joshi, meanwhile, said shareholders “were not happy” with the profit of just under R6.5bn the company was making and they were hoping to push it up by about R75 million.
In his ruling, Sullivan said that in general, the employees all said they had not been consulted. The personal use of the vehicles was a “benefit” which had persuaded them to work for the company.
“After they testified, the company conceded that the value to them of the use of the company vehicle would be between R6 000 and R8 000 a month. The tax savings, on the other hand, would be between R315 and R1 900 a month,” he said.
“The company contended that it was obliged to cancel all private use as a result of economic necessity. This boiled down to shareholders being unhappy with a profit of R6 469 million and would prefer R6 544 million."
“Under no stretch of the imagination can this amount to economic necessity," he said.
Ridiculous arguments
“In making this decision, I have taken into the particular submission that the company could ‘go under’, if the share price decreased and people sold their shares," said Sullivan.
“While, in the very long run, this statement might be true, saving R78 m in the circumstances of this company, cannot affect the issue in any significant way and is simply not fair.”
He said the argument that the employees tax saving would equal the loss of the use of the vehicles was “so ridiculous that if it were made honestly, one must question the intelligence of those who made this claim”.
Mati, he said, was an extremely poor witness. There was no suggestion that anyone was using their vehicles “illegally” and it was obvious that the benefit had existed for the past 15 to 20 years.
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