The two largest unions at Transnet have demanded wage increases five times the rate of inflation, citing a variety of issues facing the working class, adding another layer of complexity for CEO Michelle Phillips.
In what could be a sign that both parties recognise the high stakes and the strong likelihood for disagreements, the parties signed picketing rules two weeks before the negotiations started on Tuesday.
Transnet has offered an increase of inflation plus 1% in the first year and inflation plus 0.5% in the second and third years, totalling a cumulative 14.5%. Inflation is hovering around 3%.
The SA Transport and Allied Workers Union (Satawu) is demanding a 17.5% three-year hike. The United National Transport Union (Untu) wants 12%.
The parastatal’s offer opening offer reflects its financial constraints, with interest on its R100bn debt pile consuming R1bn a month.
Ratings agencies and economists say Transnet would need financial assistance from the state to fulfil its role as a crucial player in the economy and retain access to capital markets.
“Transnet considers the offer to be reasonable and fair given the current financial and operational challenges and takes into consideration the cost of living, the wellbeing of employees, job security and the long-term sustainability of the organisation,” the ports, rail and container terminals operator said.
‘Strategic priorities’
“A speedy conclusion of the negotiations will enable Transnet to focus on its immediate strategic priorities of improving operational and financial performance, while positioning the organisation for future growth, thereby ensuring job security for current and future generations of South Africans.”
Union leaders say their demands reflect the escalating costs of education, housing and healthcare even though overall inflation has eased.
Satawu also wants a freeze on job cuts while the deal is in force and cheaper medical aid.
“The union is rather disappointed by the management’s approach,” Satawu spokesperson Amanda Tshemese said.
“They started these negotiations in a very bad and clumsy way, as they indicated to us that they will be guided by the CPI [consumer price index]. Management is undermining our intelligence,” Tshemese said.
“They are not in a position to predict how CPI will look like next year or in 2027. We are not going to accept that.
“We are hopeful that the management will table a decent and reasonable offer.”
Untu said it was “utterly dismayed” at Transnet management’s strategy to delay the conclusion of the wage negotiations.
“Untu rejects this insulting across-the-board offer,” Untu spokesperson Atenkosi Plaatjie said.
“We believe management is selectively using the CPI to their advantage. In 2022, they rejected our request for a CPI-based increment, but now that the CPI is lower and more favourable to them, they are offering it to employees,” Plaatjie said.
Delaying tactics
Besides a one-year, 12% across-the-board increase, Untu wants a nonretrenchment clause, a R2,750 monthly housing allowance, a R2,950 medical aid allowance, overtime capping to be removed and for the wage talks to be concluded by April 1.
“Untu’s wage demand is also influenced by the current economic challenges, including the rapidly rising cost of living. We do not accept these delaying tactics aimed at frustrating labour,” Plaatjie said.
“It is evident that management is employing positional negotiation strategies, and we are concerned that this approach will hinder progress. Untu demands that management revisit its proposal and provide a fair wage offer to employees. We are afraid that labour will find itself back in the same position it did in 2022, when we took to the streets to demand fair and just wages to meet the economic crises facing the working class.”
Transnet, one of the state-owned enterprises looted and hollowed out during the state capture era, remains dogged by a litany of challenges, including ageing infrastructure, vandalism, and logistical issues that have disrupted freight rail operations at ports.
The cash-strapped entity, which reported a R2.2bn loss for the six months ended September, operates the country’s 21,323km of rail infrastructure.
Correction: March 5 2025
This story has been updated to reflect that Transnet has offered an increase of inflation plus 1% in the first year, instead of 4.5% as earlier reported. Business Day regrets the error.
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