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Vodacom pays ex-worker for ‘Please Call Me’ idea after deadlock

‘Vodacom considers the matter as finally settled and closed.’

Vodacom Group is paying out “reasonable compensation” to a former employee of the South African mobile-network operator for his idea to develop a popular call-back service after a former chief executive officer first took credit for the product.

The settlement comes almost a decade after Kenneth Makate started court proceedings against Vodacom for credit and financial compensation for the service that allows customers with a zero balance on their mobile phones to contact someone free of charge with the SMS message ‘Please Call Me.’

“Vodacom can confirm that the group CEO has met with the legal representatives to convey his decision and determination on reasonable compensation,” spokesman Byron Kennedy in a response to questions. “In the spirit of the confidentiality agreement both parties signed as part of the negotiating process, Vodacom will not disclose the amount set by the CEO.”

Makate, 42, took the idea to Vodacom’s product-development team while he was working in the finance division in the early 2000s. Alan Knott-Craig, who was the CEO at that time, had to determine reasonable compensation for the idea, which didn’t happen then. After lengthy court proceedings and a deadlock in negotiations in October last year, current CEO Shameel Joosub has now decided on fair compensation for the idea.

About 140,000 customers made use of the service on its first day in operation. While it is difficult to determine how much revenue the service generated for the company, an initial development plan in 2001 for ‘Please Call Me’ said Vodacom could make as much as $23 million a day from people using the service. “Vodacom considers the matter as finally settled and closed,” said Kennedy.

© 2019 Bloomberg L.P

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I sincerely hope that the compensation to this ex staff members does not burden shareholders and that the directors at the time and during the window period are compelled to repay their handsome bonuses to neutralize the compensation

grahamcr, if you have the FEAR of Almighty God in you and you want to prosper and not REGRET later in life, you won’t say this to an ex-staff of Vodacom who created value that shareholders and directors of Vodacom have been enjoying for 18yrs without compensating the ex-staff.

Vodascum

Proudly not associated with them for over 10 years

I wonder what his employment contract specifies? Generally, IP developed during employment belongs to the employer. Is this case different?

Ordinarily maybe, but the head of product development made a verbal agreement to compensate him. The case has gone through the courts, you can read up on why he won.

It is estimated that Vodacom could make as much as $23 million a day from the idea yet graham is hoping shreholders of which he is presumably one, hopes that compensation to the exemployee will not burden the shareholder – what disgusting greed. I bet he got nowhere near enough compensation. And he needs to cover all the legal costs of getting fair treatment.

Thank you DaH! I’m equally surprised Graham could make such a selfish statement without consideration for the ex-staff of Vodacom on whose sweat and blood dividends and bonuses have been paid to shareholders and directors of Vodacom for more than a decade without compensation to the creator of the VALUE. That statement from Graham is very cruel! Vodacom’s behaviour is highly unethical and oppressive. Vodacom should be sanctioned actually for also delaying for more than two (2) years to implement the Constitutional Court ruling in favour of the ex-staff of Vodacom! We are not in apartheid era but democratic era so nobody or organisation is above the law in South Africa.

Nathaniel and DaH, read my comment again – I am neither denying the ex staff member compensation if he was promised the compensation (as is alleged to have happened). My argument is that management and the directors were/are unethically and will escape with no censure of a monetary nature. Shareholders invest in companies with the expectation that they run their business ethically and in terms of various Acts. So when the company directors are parties to malfeasance and are not required to pay back the funds they acquired unethically why should the shareholders suffer at their hands. On a larger scale think Steinhoff and how directors/CEO have destroyed shareholder value.
I am not decrying the ex-staffmember his compensation but I do behieve that the shareholders will be ultimately the carriers of this compensation – and remember many pension funds hold Vodacom shares and this affects their pensioners which could be you and I

Graham

Your excuses makes no sense at all.

The shareholders of Vodacom SHOULD be paying – handsomely – the compensation due to this Inventor PRECISELY because of the huge benefits THEY directly derived from his invention.

And they should be proud and enthusiastic to do so.

Gosh, the attitude should be “gee, how can we encourage more of this at this company?”.

Not this greedy, churlish, parsimonious behaviour of trying to nickel and dime the guy.

I have to smile at this claim that shareholders investing in companies “… expect them to behave ethically…”

I have yet to see these “principled investors” EVER speak up on ethical matters when they should have. Did you?

Greed is all too often the ONLY motive driving “investors”.

Ethics? Pull the other one!

http://www.saflii.org/za/cases/ZACC/2016/13.html (26 April 2016)

You will notice that the court does not specify the amount to be paid. Allan Knot Craig does not emerge from this looking good at all.

The order of the Gauteng Local Division of the High Court, Johannesburg, is set aside and replaced with the following order:
“(a) It is declared that Vodacom (Pty) Limited is bound by the agreement concluded by Mr Kenneth Nkosana Makate and Mr Philip Geissler.
(b) Vodacom is ordered to commence negotiations in good faith with Mr Kenneth Nkosana Makate for determining a reasonable compensation payable to him in terms of the agreement.
(c) In the event of the parties failing to agree on the reasonable compensation, the matter must be submitted to Vodacom’s Chief Executive Officer for determination of the amount within a reasonable time.
(d) Vodacom is ordered to pay the costs of the action, including the costs of two counsel, if applicable, and the costs of the expert, Mr Zatkovich.”
4. The negotiations mentioned in 3(b) must commence within 30 calendar days from the date of this order.
5. Vodacom is ordered to pay the applicant’s costs in this Court and in the Supreme Court of Appeal, which include costs of two counsel, where applicable

I wonder what would be considered fair compensation? It would be interesting to get some thoughts on this.

I had a look through the Vodacom financial statements and provisions (current liabilities) jump from 92m in 2016 to 188m in 2017. They do not state whether that was as a result of the court judgment. It is possible that they did not raise a provision. Net profit was about 13b.

The cost to Vodacom must be huge as you can imagine what this type of behavior has done to innovation coming from within the firm.

If you look at Vodafone and Vodacom’s published financial statements for 2018 you will see that both accounts have an entry in them under Contingent Liabilities referring to the Vodacom V Makete SA Constitutional Court Judgement in favour of Makete.

They are required by law to mention potential liabilities of over 250,000,000 UK Pounds in Vodafone’s accounts, as any ‘settlement’ would affect their shareprice. Vodafone, Vodacom’s parent company is under serious pressure to ‘cut costs’ across the board and the new CEO Nick Read has moved up from the CFO position to sort out their finances.

Has anyone noticed why Julius Malema and the EFF have been conspicuous by their silence after this ‘settlement’ announcement was made by Vodacom? It would be a golden opportunity to jump on the bandwagon and milk this story to death. After all, they are champions of the poor.

Maybe they did a deal with Shameel, the CEO of Vodacom when they met recently after the Vodacom shops got trashed, not to get involved with this matter possibly in return for some reward later. Money talks and Malema and the EFF have been known to listen.

This has probably been a carefully orchestrated strategy by Vodacom. If they knew that there would be zero backlash from Malema and the EFF, they would be emboldened to make such a derisory settlement offer to Makete.

Someone should ask the EFF why they are so quiet about this? “Pay Makete the Money Vodacom!” could be a new war cry for them.

It is highly unethical and oppressive for multinationals to be STEALING ideas from small enterprises. MTN also has a pending case of idea theft from a Polokwane couple at the South Gauteng High Court (Johannesburg) since 2009. It’s really disappointing that government is not doing anything in terms of passing a bill that’ll give very harsh punishment to any mmultinationals that STEALS from a small enterprise (SMMEs)because we all know the greatest job creators in any society. This trend of stealing ideas from SMMEs must stop or else it’ll impact negatively on job creation tgat government aims to achieve in its national development plan (NDP).

https://www.iol.co.za/news/south-africa/mtn-stole-our-sms-idea-463698

I’m just glad I really don’t get them anymore 🙂 What a nuisance.

Shocking that Vodacom took this long to honour a simple promise to a staff member! Vodacom sucks!

Word doing the rounds is that this writer from Bloomberg is facebook friends with Byron Kennedy from Vodacom and hence the somewhat slanted article found to be not quite true.Expected better from Bloomberg and Mr kennedy looks like your typical no backbone comms person.

Word making rounds on twitter is that this ex-staff member will be given R10 million. That is ALOT of money to me, but if the idea was making $23 million per day? Should they not maybe add another zero to that R10mil?

Add TWO zeros and you’re getting into the “fair compensation” ballpark!

But $23m a day is clearly bogus as that’s over R100 billion per annum…just from extra revenue in response to this message?! Never.

It’s probably well less than 1% of that number.

That said, Vodacom are quite stupid to have not compensated this person handsomely. Any other employees with great ideas today will certainly never suggest them freely.

Makate was on radio and he confirmed that he has not received any fair compensation from VODACOM. MONEYWEB how can you publish this article based purely on the input from the acused who has been mischievously dodging this obligation for over 2-years? You should’ve asked Makate if he was indeed paid. PATHETIC reporting. we are no longer in 1988 where you have sole access to information, it has been democratized.

Where is Julius Malema and the EFF in all this? They are strangely silent for some reason.

It wasn’t very long ago that their members trashed some Vodacom retail outlets, because they were unhappy with some journalist turning up at an awards dinner. it was so serious that CEO of Vodacom met with them to apologise, whereupon they agreed to behave themselves.

Maybe they got around to discuss the Please Call Me Makete case and it was decided to ‘turn a blind eye’ to any settlement announcements by Vodacom later.

Julius, Floyd and the EFF claim to fight for the poor and corruption. In this case, they should be outraged at what Vodacom is doing to Makete, yet they have said absolutely nothing since the announcement.

It’s election year and political campaigns ‘to the faithful’ are very expensive….

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