The wage dispute between rail and ports company Transnet and its biggest trade union, the United National Transport Union (Untu), is intensifying.
In a note to staff this week, Transnet accused the labour movement of trying to push the company to the brink of bankruptcy with unaffordable wage demands, while the union warned of the devastating effect strike action would have on the company if its wage demands were not met.
The two have officially reached a deadlock, with talks breaking down at the Commission for Conciliation, Mediation & Arbitration (CCMA). The union has refused to sign a three-year wage agreement that has been accepted by a rival union, the South African Transport and Allied Workers Union (Satawu), for increases of 6% in the first and second years and 5.5% in the final year.
It is threatening to take its 26,500 members on strike, a move that will almost cripple the rail and logistics entity, which has been trying to recover from years of underinvestment in its infrastructure and from past state capture efforts. A strike by Untu members — many of them skilled technical personnel — would most likely halt freight trains and shut down critical port and pipeline operations.
Untu led an 11-day strike at Transnet in 2022 and is now in the process of balloting members on whether to down tools again. Its counterproposal of a 10% wage offer has been rejected outright by management as unaffordable.
Untu is disingenuous in being selective about what to reveal and what to keep confidential
— Transnet
In a letter issued by its group corporate affairs office to staff members, Transnet accused Untu of negotiating in bad faith and putting the company at risk.
“The fact is, all the wage demands presented by Untu thus far in the negotiation process are unaffordable and unrealistic and if implemented would put Transnet in serious financial jeopardy, pushing the company to the brink of bankruptcy. As custodians of this organisation, we have a duty to ensure its long-term sustainability for employees, customers and the broader economy,” the company told employees.
It accused Untu of disregarding CCMA rules by airing confidential matters discussed during conciliation proceedings.
“Untu is disingenuous in being selective about what to reveal and what to keep confidential. Given that Untu has chosen to break the seal of confidentiality around the conciliation proceedings, we urge Untu to be fully transparent and publicly disclose to its members all the details of the proposals that they claim were rejected by Transnet management throughout the proceedings and at the conciliation, which was facilitated by a commissioner from the CCMA,” said Transnet.
The rail and ports entity maintained that its offer was fair, above inflation, and would pave the way for an environment that would transform Transnet into a profitable company.
It said it was still committed to exploring early retirement, redeployment, reskilling and restructuring as alternatives to forced retrenchments.
“Transnet is committed to retaining its workforce and, in addition to the above, has stated in the wage agreement that efforts will be made to avoid forced retrenchments. This includes the establishment of a multidisciplinary committee to assess the impact of restructuring initiatives,” said Transnet.
It said it had been transparent in the talks and rejected Untu's claim that it reached a secret wage deal with the Cosatu-affiliated Satawu.
“There is no hidden agreement, our approach remains one of openness and integrity in our interaction with all stakeholders. Our sole mandate is to transform Transnet, preserve jobs and get the country working,” the company said.
Transnet also denied it was bullying and intimidating Untu members, accusing the union of giving its members the impression they would automatically receive backpay should a wage agreement be reached.
In its own letter to members, Untu blamed the management of Transnet, accusing them of entering the wage talks with no commitment to resolving the impasse and of resorting to “power plays and political posturing” instead of meaningful engagement.
“Untu finds management's approach to the conciliation process deeply regrettable, especially given the serious socioeconomic consequences that industrial action may carry. We hoped for a genuine effort to protect the interests of workers, ensure the long-term sustainability of the company and minimise the impact of our extremely fragile economy,” said general secretary Cobus van Vuuren.
He ripped into Satawu, accusing it of signing a deal that excludes a clause preventing mandatory retrenchments.
Van Vuuren said Transnet management had undermined its negotiating team when Untu entered the negotiations to try to resolve the impasse had by presenting multiple proposals it believed could be taken back to its members for a mandate.
“We went even further by proposing a longer-term wage settlement agreement to ensure continuous labour stability as Transnet works to restore the entity, improve efficiencies and improve revenue. Untu did this with a clear understanding of the vital role Transnet plays in the economy and its mandate to drive job creation and retention,” the general-secretary wrote.
Our economy and its citizens simply cannot afford a protracted strike, which is partly why Transnet currently finds itself in such financial difficulty. It has all but abandoned infrastructure maintenance and development in order to service its bloated wage bill
— Malcolm Hartwell, consultant at Norton Rose Fulbright
While Untu presented multiple proposals, Transnet management chose not to move from the wage agreement signed with Satawu, disregarding the devastation that industrial action could have on the entity, its employees and the South African economy, Van Vuuren charged.
“Instead, the focus remained on selling the wage agreement that Transnet signed with a minority union. While Transnet denies that collusion has been at play, Untu cannot help but further wonder about the sincerity of this statement, especially considering the actions taken by the Transnet negotiating team throughout this process.”
The union has commenced a balloting process, during which members will indicate whether they want to down tools or not, he said.
Malcolm Hartwell, a consultant at Norton Rose Fulbright, said a strike by one of the unions would place even more pressure on Transnet.
“Our economy and its citizens simply cannot afford a protracted strike, which is partly why Transnet currently finds itself in such financial difficulty. It has all but abandoned infrastructure maintenance and development in order to service its bloated wage bill.
“Although Transnet could theoretically continue to operate at reduced levels because a portion of its workforce is on strike, it seems likely, as has happened in the past, that those strikers will encourage or prevent non-Untu members from working,” Hartwell said.
He noted that in 2022, South Africa’s total exports were valued at $122bn (R2.30-trillion) and its imports at $112bn (R2.11-trillion) .
“That is approximately $640m (R12bn) worth of products entering and leaving South Africa every day. Clearly, a strike by Untu will not cause R12bn in losses every day, but it will certainly have a significant effect on imports and exports and as a result on our economy,” he said.
In the circumstances, he said, Transnet would take every step possible to avoid a protracted strike, even if it meant spending money despite being financially stretched, to keep operations normal.
“It is accordingly to be hoped that a strike can be avoided as the last thing South Africa needs now is a protracted strike affecting Transnet as the backbone to our logistics and import and import-driven economy,” Hartwell said.
Dave Watts, of the South African Freight Forwarders Association, said there was a lot to lose if the strike went ahead.
“Any situation where Untu, who are now the leading union, call for a strike or other kind of industrial action will have huge potential to disrupt logistics and consequently the broader economy as it has in the past. How much that might be is anybody’s guess as it will depend on the length and the nature of the industrial action,” he said.
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