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IOL News
19-05-2025
- Business
- IOL News
UIF's R381 million deal with SA Post Office aims to preserve jobs as unions call for long-term solutions
The South African Post Office (SAPO) has entered into a partnership with the Unemployment Insurance Fund. Image: Independent Newspapers Archives The Unemployment Insurance Fund (UIF) has entered into a multi-million rand deal with the South African Post Office (SAPO) that could help stave off the immediate loss of thousands of jobs at the state-owned entity. Through the Temporary Employer-Employee Relief Scheme (TERS), the UIF will inject over R381 million into SAPO over a six-month period. While the move has been welcomed by some labour unions, an economist is doubtful that it will have any significant long-term impact on improving the fortunes of the Post Office. Employment and Labour Minister Nomakhosazana Meth said the implementation of the signed agreement between SAPO and the UIF was aimed at preserving nearly 6,000 jobs and was a 'bold and necessary step to protect workers and restore confidence in public institutions.' Video Player is loading. 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Next Stay Close ✕ The UIF and SAPO have formally entered into a Memorandum of Agreement (MOA), marking the establishment of a strategic partnership between the two entities. 'The TERS programme is not just a financial mechanism; it is a strategic tool to stabilise employment, support economic recovery, and ensure that no worker is left behind,' Meth said. The minister explained that the funding will be disbursed in monthly tranches through a dedicated TERS bank account, with strict governance, auditing, and compliance measures in place. SAPO is required to submit regular reports, maintain transparent accounting records, and implement a detailed turnaround strategy. Earlier this month, the chairperson of the Portfolio Committee on Communications and Digital Technologies, Khusela Diko, described the approval of six months of income support for the Post Office as 'a much-needed lifeline that the state is both morally and duty-bound to extend.' According to reports, this latest round of income support brings the total amount of government bailouts for SAPO to approximately R9.8 billion since 2014. Zwelinzima Vavi of the South African Federation of Trade Unions (Saftu) said that while the trade union federation supported the funding move, it was a short-term measure. "We need a permanent solution.' He stated that they have written to the president about the matter and how it could be better handled but have not heard back. In the letter, Saftu argued that SAPO has improved and should be provided with more substantial support from the government. 'Since entering business rescue, SAPO has registered progress. Between June 2023 and June 2024, SAPO has turned its net asset value from a negative R7.9 billion to R840 million, bringing it into solvency. Furthermore, SAPO has since seen operations improve — reducing backlogs in its mail centre and completing data centre migration. "However, despite these recorded partial successes, the Treasury appears to have turned against the government's commitment to save this vital service to the poor with an additional R3.8 billion to complete the business rescue process.' Vavi said Saftu believed that SAPO has a Universal Service Obligation mandate; therefore, it must be saved and retained in public hands. If its liquidation were a reality, the consequences would be devastating for the working class, particularly those in rural areas, he concluded. The Congress of South African Trade Unions (Cosatu) also welcomed the agreement. It explained that the funds would cover 75% of the wages of SAPO's 6,027 employees over the next six months while the entity undertakes its turnaround plans. 'While this relief comes after much anguish and extreme hardship imposed on SAPO's staff by its management, it will provide badly needed comfort. It is critical that SAPO be given the full support it needs to effect its turnaround and ensure that it is firmly set on a path to recovery and sustainability,' said the trade union federation. Cosatu added that the remaining balance of the previously committed R3.8 billion injection from the National Treasury also must be provided to SAPO to enable it to settle debts and outstanding payments. 'As provided for in the SAPO Amendment Act, the Post Office's turnaround plans need to include, with the support of key departments, the establishment of a one-stop shop where citizens can apply for a variety of government services, e.g., identity documents, social grants, educational or SMME financing, etc. Equally critical is SAPO's entry into the lucrative courier sector, as relying upon its historic business model is clearly not sustainable given the rapid advent of the fourth industrial revolution. 'The current challenges hindering the turnaround of the Postbank also need to be tackled, as its successful rollout as a state bank targeting historically redlined communities will be a further boost to SAPO given their symbiotic relationship and shared infrastructure. The government must lead from the front and utilise SAPO and the Postbank as their service providers for postal and courier services, rolling out civic, social grant, and other services to the public, as well as banking needs. This would provide SAPO and Postbank with the badly needed liquidity they require to survive and thrive,' it concluded. However, economist Dawie Roodt is not convinced of SAPO's continued survival. 'The UIF is allowed to invest its surplus funds, but I doubt they are allowed to take this kind of risk. This money will not change anything; it will go to salaries and will help to kick the can down the road for a few months. We should be honest that the Post Office is dead; it is so far behind on its debt, it's bankrupt. If there is something still left, they should sell it,' said Roodt. THE MERCURY
eNCA
19-05-2025
- Business
- eNCA
Post Office jobs deal now active
JOHANNESBURG - A deal between the South African Post Office and the Unemployment Insurance Fund has been announced formerly by the Minister of Employment and Labour. It's aimed at saving nearly 6,000 jobs and revitalising one of the country's most critical state owned entities. Through the Temporary Employer-Employee Relief Scheme the UIF will inject over R381 million into the post office over six months. This will provide relief to workers while the Post Office attempts to turn around.
The South African
19-05-2025
- Business
- The South African
SA Post Office thrown R381 million lifeline
In a move to preserve jobs and restore public confidence, Minister of Employment and Labour, Nomakhosazana Meth, has confirmed the implementation of a R381 million financial lifeline for the embattled South African Post Office (SAPO). The funding aims to stabilise the organisation as it continues its business rescue journey. The funding comes through the Temporary Employer-Employee Relief Scheme (TERS), administered by the Unemployment Insurance Fund (UIF). A Memorandum of Agreement (MOA) has been signed between SAPO and UIF to disburse the funds over six months, offering temporary relief to 6 000 workers while a long-term turnaround strategy is executed. 'This is a bold and necessary step to protect workers and restore confidence in our public institutions,' said Minister Meth. 'TERS is not just a financial mechanism – it is a strategic tool to stabilise employment, support economic recovery, and ensure that no worker is left behind.' The funds will be disbursed in monthly tranches via a dedicated TERS bank account, with strict auditing, governance, and compliance conditions in place. The SA Post Office, founded in 1792, has endured years of financial decline, culminating in a R2.17 billion operating loss in 2024. The company was placed under provisional liquidation in February 2023, but later rescued by court-approved business rescue practitioners (BRPs). Since then, SAPO has implemented aggressive restructuring measures, including: Closure of 366 branches , leaving just over 650 operational , leaving just over 650 operational Retrenchment of more than 4 300 employees in April and May 2024 in April and May 2024 Ongoing efforts to reduce losses and revive profitability by 2028 In addition to the TERS lifeline, the National Treasury granted a R2.4 billion bailout in the 2023/24 financial year to fund retrenchments, creditor settlements, and basic operations. However, the BRPs warned Parliament earlier this year that SAPO still requires an additional R3.8 billion to successfully complete its turnaround and restructuring plan. The TERS funding was approved following a rigorous review by the TERS Single Adjudication Committee, which includes stakeholders from the CCMA, Department of Higher Education, and Department of Small Business Development. SAPO is now required to: Submit regular financial and progress reports Uphold transparency and proper accounting Demonstrate tangible progress on its revitalisation plan Despite its financial woes, SAPO's corporate plan through to 2030 indicates optimism. The organisation projects progressive reductions in losses, aiming to return to profitability by 2028. This latest intervention underscores the government's commitment to job preservation and SOE reform, even as tough fiscal conditions demand accountability and restructuring. When last did you step into a Post Office branch? Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
19-05-2025
- Business
- IOL News
SAPO and UIF agreement to protect nearly 6 000 jobs
The implementation of the signed agreement between the South African Post Office (SAPO) and Unemployment Insurance Fund (UIF), aimed at preserving nearly 6000 jobs, is a bold and necessary step to protect workers and restore confidence in public institutions, says Employment and Labour Minister Nomakhosazana Meth. Through the Temporary Employer-Employee Relief Scheme (TERS), the UIF will inject over R381 million into SAPO over a six-month period. This intervention is designed to provide immediate financial relief to 5956 employees while enabling SAPO to implement a sustainable turnaround strategy.
The Citizen
19-05-2025
- Business
- The Citizen
Another funding injection saves Post Office jobs
The post office will receive R381 million via the Ters scheme over the next six months to preserve the jobs of employees. Almost 6 000 South African Post Office (Sapo) jobs will be saved via another funding injection. Sapo and the Unemployment Insurance Fund (UIF) agreed on a deal to fund employee salaries while the government works to restore the postal service's fortunes. The agreement between the two government entities will see the return of the Temporary Employer-Employee Relief Scheme (Ters) used during the 2020 global health pandemic. Protecting Sapo workers The Ters scheme will inject R381 million into the post office over the next six months to assist 5 956 employees. Sapo had been hoping for a R3 billion bailout at the end of 2024 to avoid liquidation, but National Treasury decided against the move. The Department of Employment and Labour (DEL) on Sunday announced the implementation of the Ters deal, highlighting it as a crucial part of the post office's stabilisation. 'This is a bold and necessary step to protect workers and restore confidence in our public institutions,' DEL Minister Nomokhosazana Meth. 'The Ters programme is not just a financial mechanism, it is a strategic tool to stabilise employment, support economic recovery, and ensure that no worker is left behind,' the minister explained. The funds due to employees will be sent to Sapo every month, with the post office responsible for auditing and compliance throughout the process. 'Sapo is required to submit regular reports, maintain transparent accounting records, and implement a detailed turnaround strategy as a condition of the funding.' The post office has found formulating a turnaround strategy difficult. In 2023, it entered business rescue with R8.7 billion owed to creditors. Sapo received a R2.4 billion bailout from the government in 2023 shortly before receiving a provisional liquidation order, which was added to another R1 billion funding injection in 2019. Despite the entity's troubles, President Cyril Ramaphosa signed the South African Post Office SOC Ltd Amendment Bill late last year. 'The new law enables the post office to serve as a hub for government services and other agency services, and as a digital hub for businesses and communities,' the Presidency stated in December. 'The post office will also be able to serve as a logistics partner to other e-commerce providers – including small enterprises and informal traders – and any future business that the state-owned company may develop to serve users and consumers,' the Presidency added. NOW READ: Union fights liquidation of Sapo while govt says it cannot bail it out
