Transnet is likely to reduce its more than 55,000-strong workforce should the state-owned logistics company go ahead with the partial privatisation of its flagship Durban container terminal (DCT 2), according to legal opinion obtained by the two biggest unions at the entity.
United National Transport Union (Untu), representing 60% of Transnet's workers, and SA Transport and Allied Workers Union (Satawu), say despite Transnet assurances that no jobs will be lost once the Philippines-based multinational port operator takes over operations of the DCT 2, the entity will be forced to implement a section 189 retrenchment process. This is likely to occur after a 12-month period after the conclusion of the transaction between Transnet and International Container Terminal Services Inc (ICTSI).
“We cannot as yet quantify the number of job losses because that will be the decision of the new equity partner,” Satawu deputy secretary-general Anele Kiet told Business Day.
ICTSI, a R140bn-plus operator straddling six continents, was announced in July as Transnet’s preferred equity partner that will run the Durban container terminal for the next 25 years.
Transnet previously said the transaction between it and ICTSI will result in no retrenchments and employees will retain the same terms and conditions before and after the introduction of the private sector partner.
“The legal opinion obtained by Untu and Satawu highlights the fact that Transnet has failed to guarantee job security, and in terms of section 189 of the Labour Relations Act as management has only given labour an undertaking that no retrenchment will be implemented for a period of 12 months from the effective date of the transaction but it is of importance to note that after this period lapses, Transnet will be entitled to implement a section 189 retrenchment process should there be redundant positions once the operations are handed over to the Philippines entity which won the tender,” the joint statement by the two labour unions says.
“After a period lapses, Transnet will be entitled to implement a section 189 retrenchment process should there be redundant positions ... the issue of automation remains a grave concern for labour which could render the jobs of Transnet employees obsolete.”
ICTSI was one of six bidders that submitted proposals after being shortlisted from 17 potential equity partners who responded to a request for interest in August 2021.
ICTSI, the eighth-largest container terminal operator in the world by TEU (twenty-foot equivalent unit), operates in six continents and four African countries.
The deal is the first port privatisation for Transnet, which has faced criticism for the poor performance of its ports, which rank among the worst in the world in terms of efficiency and reliability. In a 2021 World Bank index of container port performance, Durban ranked 364th out of 370 and two other Transnet ports were in the bottom 10.
“Labour will study the legal opinion obtained and decide on the best recourse to pursue while considering that whichever route we pursue should we have the least detrimental effect on sustainable employment,” the statement reads.
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