Published On: Mon, Jun 1st, 2020

Telem sends letter to union; all salaries to be cut by 12,5%

TelEm Group building

~ TelEm threatens collective layoffs if no agreement with the union can be reached ~

POND ISLAND — In a letter dated June 1, 2020, CEO of the Sint Maarten Telecommunication Operating Company N.V. (TelEm), Kendall Dupersoy, informed the board of the St. Maarten Telecommunications Union that the St. Maarten government as the ultimate shareholder has instructed the company to adjust the labor conditions of its employees resulting in a decrease of 12.5%.

This has to be implemented ultimately July 1, 2020 and has to remain in effect until further notice, according to the letter. “As you are also aware the COVID-19 pandemic has caused an island- and worldwide crisis, resulting in a lot of pressure being put on the business of the Company. This has only added more to the Company’s financial struggles, which we have been facing for the last few years.” TelEm CEO stated in the letter. “Consequently, it is imperative to ensure that the financial position and future existence of the Company is safeguarded, thereby also safeguarding the employment of our employees as much as possible.”

“In light of the abovementioned, we have determined that it is in the best interest of the Company to proceed with the Government’s instruction.” the CEO continued in his letter. “Not only do we show solidarity and thereby ensure that our country gets the financial support that it so desperately needs, which ultimately benefits us all, but we also contribute to safeguarding the future existence of the Company. If we do not comply with the Government’s instructions, that will jeopardize the financial support for our country, which will directly impact the livelihood of our business. That is a risk that we simply cannot afford.”

In the letter, the CEO lists a number of cost-cutting measures. Such as the fact that COLA and salary increases will no longer be applied; the group savings plan will terminate effective January 2021 and will not be renewed; employees will no longer be placed on call and thus will no longer receive an on-call allowance, and bonuses will no longer be paid out.

CEO Kendall Dupersoy also lists a number of cuts in the operational costs of the company and mentions that the company is presently also negotiating reductions in a number of other costs, such as capacity lease costs, rent, building maintenance, vendor prices, consultancy and contractors’ fees, vehicle use, advertising and marketing, and legal fees.

“We are doing our best to achieve this but are dependent on the cooperation of the counterparties.” writes Dupersoy. “So far we are hopeful that we will succeed and this will then also contribute to our cost cutting efforts.”

In his letter, Dupersoy invites the union to submit “alternatives for the proposed reduction of the labor conditions as well as other ways that the company can cut costs”. A deadline of June 3, 2020, is stated in the letter for the union to respond. According to the letter, there is already a meeting scheduled for Tuesday, June 2, at 2 pm between TelEm and the union.

Dupersoy goes on to state that “We apologize for the short notice, but as you know the instruction was only received recently and after that, we have had to immediately proceed with the necessary assessments, which we only finalized last Friday (29 May 2020). Further, we are required to inform the Government by this Friday, 5 June 2020, on our cost-cutting measures.”

The CEO asks the union for its “cooperation to achieve what we must during these difficult times” and states that the company continues to count on the union’s understanding. However, the CEO concludes his letter by stating: “Finally, in the event we cannot work together on this and achieve a result that works for all stakeholders, the Company will have to proceed with a reorganization with collective layoffs as a result. That is something we are still trying to avoid, as we are still doing our best to keep our employees employed.”

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Related links:
SMCU union rejects TelEm’s pay cut proposal
Letter to Union re decrease labor conditions final
Troubled TelEm (financial analysis StMaartenNews.com)
Stimulus plan asks Netherlands for 254 million