Transnet’s final wage offer after downgrade comes as shocktounion

THE UNITED National Transport Union (Untu) is considering a final wage offer by parastatal Transnet, but has not excluded industrial action should its members reject the offer.

Transnet shocked labour on Friday by firstly putting a very low opening offer on the negotiation table at the Transnet bargaining council and then replacing it with a final wage offer after labour declined to accept, Untu general secretary Steve Harris said.

Both Transnet offers were based on the fact that rating agency S&P Global downgraded Transnet on November 28 to full junk status, days after it downgraded South Africa’s credit rating in totality to the same.

“The company alleges this had changed its financial position drastically a month after Transnet’s chief executive Siyabonga Gama announced on October 30 that Transnet’s profits have soared to R37.1 billion, thanks to the fact that the company gained market share in general freight cargo and coal volumes. Transnet’s revenue rose by 13.8 percent,” Harris said.

Gama also assured Untu in front of a full house at the Transnet indaba on October 23 at Esselenpark, Johannesburg, that voluntary severance packages would not be on the table as the company intended to create 20 000 new skilled job opportunities by 2022.

“But now his management team is saying the downgrading has a significant impact on Transnet’s balance sheet and Transnet management’s biggest concern now is to manage costs and to protect the company against growing fixed costs.

“According to the company, labour’s demand of a 12 percent salary increases every year for the next three years will result in a R8.8bn increase to its wage bill over the next three years, which will have a significant impact. For Transnet, double-digit salary increases are therefore highly unaffordable.

“Transnet also changed its mind about the no retrenchment for the next three years, saying that the current economic climate is too uncertain and that there might be an operational need for retrenchments in future,” Harris said.

Transnet started its wage offer by saying that labour’s demand of 12 percent was very high, taking into consideration the current consumer price index (CPI) was 4.8 percent.

It offered Untu members a multi-term wage agreement with a 5 percent salary increase for 2018, 5.5 percent in 2019, and 6 percent for 2020. Very favourable Transnet was not prepared to add an additional 2 percent increase for employees earning less than R100 000 a year. Transnet believed its entry level wages “are very favourable in the market and above the minimum wage”, he said.

Transnet was also not prepared to increase its medical subsidy or housing allowance to more than the agreed wage percentage, while labour demanded that both be increased from the current R1 300 to R1 790 in 2018, R2 500 in 2019, and R3 500 in 2020, because the only two medical aids Transnet members could belong to had increased fees by between eight and 10 percent for 2018.

Other points of contention included night shift and standby allowances.