Irregular salary increases for South African Broadcasting Corporation (SABC) staff in the past was part of the reason the public broadcaster now felt compelled to retrench hundreds of employees, the company's human resources chief told MPs on Tuesday.

"There has been a number of unlawful and irregular increases of employees .... there is an artificial earning power regarding a number of employees where their skills do not connect with their remuneration," Jonathan Thekiso told Parliament's portfolio committee on communication.

The SABC's top management was pleading the case for retrenching 981 employees by invoking section 189 of the Labour Relations Act and confirmed that it had handed the matter to the Council for Conciliation Mediation and Arbitration (CCMA).

They said the company hoped that negotiations would be concluded in January, and if this were the case, retrenchment notices would be served from February.

Chief executive Madoda Maxakwe said if the company failed to reduce its staff component it was heading for a financial loss of R803-million in the current financial year, and would be factually insolvent by March. 

"If nothing is done, by the end of March, our losses will be R803-million."

He added that the broadcaster would just about be able to pay salaries in January but feared that by February this would be doubtful.

"What is very clear is that the SABC is not financially sustainable hence the decision by the board to say we should activate section 189."

Thekiso said if severance packages were calculated on the principle of one week of pay for every year with the company, the total cost would be R171-million.

The SABC has a staff complement of 3 380 employees, and makes use of 1 200 freelancers whose cost to the company came to just over R500-million, according to Maxakwe.

Employee costs come to R3.1-billion or 42 percent of the company's operational expenditure, according to figures submitted to the portfolio committee.

The retrenchment plans have met with strong opposition from labour and political parties. The Communications Workers Union has threatened that its members would go on strike if its concerns over retrenchments were not addressed by Friday. The ruling African National Congress has appealed to the broadcaster to reconsider the proposed retrenchments while the official opposition Democratic Alliance has said retrenchments should be a last resort. It argued that the company needed an independent skills audit.