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IOL News
10 hours ago
- Business
- IOL News
Business Leadership SA slams Transnet's new wage agreement as leadership failure
Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions Image: Leon Lestrade/ Independent Newspapers Business Leadership South Africa (BLSA) has criticised Transnet's new wage agreement with unions, calling it a failure of leadership and warning that it undermines the country's economic recovery. Last week IOL reported that Transnet concluded a three-year wage agreement with its recognised unions, SATAWU and UNTU, securing a 6% annual salary increase for workers over the next three years. The deal also includes increases to key benefits such as pension contributions, medical aid, housing allowances, and the 13th cheque. According to the state-owned freight and rail company, the deal came after the "conclusion of a conciliation process led by the Commission for Conciliation, Mediation, and Arbitration (CCMA)". BLSA President Busiswe Mavuso criticised Transnet's decision to provide an above-inflation increase to workers, saying that the agreement overlooks the country's weak economic growth, rising debt, and Transnet's poor performance record. "I was astounded to see the news last week of Transnet's capitulation to union strike threats, agreeing to give workers 6% pay rises in each of the next three years. This agreement represents a failure of leadership on both sides – militant unions holding the country hostage with strike threats, and management caving to their demands without a fight," Mavuso said. She added that the increases come at a time when inflation is running at 2.7%, and the economy is expected to grow by only 1.4% this year. 'While South African businesses slash costs and workers face retrenchments, Transnet workers will get pay rises that are double the inflation rate, funded by taxpayers already struggling to make ends meet.' Mavuso also pointed to Transnet's operational inefficiencies, citing an estimate from Professor Jan Havenga of Stellenbosch University that poor logistics performance is costing the South African economy R1 billion per da. In a letter following the wage agreement reached last week, SATAWU defended the agreement by emphasising that it accepted the CCMA's proposal for a 0.5% increase in the third year, which would raise the final year's increase to 6%. 'Our correspondence dated 21 May 2025 stated that the union was prepared to accept the additional 0.5% increase,' the union said. SATAWU also argued that the final agreement reflected existing provisions and legal frameworks already in place between Transnet and organised labour. "When comparing the original retrenchment clause and the one contained in the final wage offer, it is evident that there is no significant difference, but only a reformulation of existing provisions. The only notable amendment in the final collective agreement is the additional 0.5% increase in Year 3".
News24
6 days ago
- Business
- News24
Transnet averts strike as unions accept pay deal
South Africa's state-owned ports and freight-rail company reached a pay deal with its two recognised labour unions, averting a strike that threatened to disrupt mineral and agricultural exports. The agreement, which followed an arbitration process led by the Commission for Conciliation, Mediation and Arbitration, provides for 6% annual increases for three years, including the current financial year, Transnet said in a statement. The United National Transport Union (UNTU), which represents more than half of of Transnet's 46 000 employees, had previously rejected a wage increase offer of 6% annually in the first two years starting April 1 and 5.5% in the third year. 'The finalisation of the three-year wage agreement provides labour stability and will enable the company to focus on its immediate strategic priorities of improving operational and financial performance,' Transnet said in the statement. The deal includes increases to basic salary, pension fund contributions, medical aid subsidies and housing allowances, the company said. Both unions — UNTU and the South African Transport and Allied Workers' Union — have accepted the offer, it said. The above-inflation pay increase will put further strain on Transnet's finances. Moody's Ratings has placed the company assessment on review, warning that it will run out of money for operations and debt-servicing within three months unless it gets a government bailout. South Africa's government said this week it will give Transnet additional guarantees to settle all its debt that falls due and execute its capital-investment program. Transport Minister Barbara Creecy announced the approval of a R51 billion guarantee facility for Transnet last month and the process of giving it additional support will be finalized by July 25, according to the Department of Transport. The company's five-year corporate plan shows it needs to repay R99.6 billion.
