According to SABC CEO Madoda Mxakwe, the national broadcaster is technically insolvent and cannot fulfil its monthly obligations which is why it has no choice but to take steps that “may not be acceptable” so it does not collapse.

The SABC announced on Tuesday that it had served a notice of retrenchment according to section 189 of the Labour Relations Act. This section stipulates the guidelines for embarking on a process of retrenchments and states that an employer must be able to justify the retrenchments based on its operational requirements. The employer must also seek out appropriate measures to avoid dismissals.

Employees were issued with this notice on Monday at 5.58pm according to human resources group executive Jonathan Thekiso.

Mxakwe was joined by COO Chris Maroleng, Thekiso and CFO Yolande van Biljon during a media briefing detailing the SABC’s financial status and its notice to retrench 981 permanent employees and 1 200 freelancers.

Mxakwe said that although the broadcaster is “beginning to see positive greenshoots in quarter 2 in the implementation” of its plans to turn the SABC around, he predicted a R805-million loss for the year which he says is an indication that “what we’re doing is not enough”.

“The threat of commercial insolvency is increasing,” Mxakwe said.

In the retrenchment notice, the broadcaster said it has already embarked upon several cost-cutting measures “but there is simply no manner in which a complete organisational wide restructuring and reductions can be avoided”.

The four executives said this is why the broadcaster has turned its attention to what drives high costs, hampering the organisation’s ability to be “financially viable” and fulfill its mandate to the public.

The broadcaster’s annual wage bill is currently R3.1-billion. Of this total expense, R12.5-million goes to directors, R25-million goes to members of the executive committee, R500-million to freelancers and R1-billion to different layers of management, according to Mxakwe.

Thekiso said the SABC met with trade unions – the Communications Workers Union, the Broadcasting, Electronic, Media and Allied Workers Union and the Media Workers’ Association of South Africa — on October 12 2018 to inform them of the intent to retrench workers.

The notice to retrench, according to Thekiso, indicates why section 189 is being invoked based on structural and financial reasons.

When it comes to the structural, Thekiso said the SABC has had to rethink how it operates and the roles that the current 3 376 permanent employees and 2 400 freelancers play within the organisation. He also noted that there are cases where you find that three freelancers do the work of a permanent employee which then makes that employee redundant.

The SABC has submitted documentation to the Commission for Conciliation, Mediation and Arbitration, says Thekiso, and is waiting for a facilitator to be appointed to manage the consultation process.

Thekiso also noted that the SABC has found that there are employees that were appointed irregularly and others who received out-of-cycle salary increases. The broadcaster will approach the Labour Court to declare the appointments invalid and that money spent on these employees is recovered.