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Transnet concludes 3 year wage deal while South Africa counts costs of the strike

Transnet, the State Owned custodian of ports, rail and pipelines in South Africa concluded a 3 year wage agreement with majority labour union UNTU (United National Transport Union) on Monday the 17th Oct 2022 ending the week-long industrial action that saw port and rail activities grind to a halt.

The deal which was mediated by the Commission for Conciliation, Mediation and Arbitration (CCMA) effective from 1 April 2022, and implemented from 1 October 2022, includes below elements

• Year 1: a 6,0% increase in the basic wage for levels H to L, and 6,0% on the annual cost-to-company package for level G.
• Year 2: a 5,5% increase in the basic wage for levels H to L, and 5,5% on the annual cost-to-company package for level G.
• Year 3: a 6,0% increase in the basic wage for levels H to L, and 6,0% on the annual cost-to-company package for level G.
• An increase in the medical aid subsidy, in line with the increases in the basic wage, over the duration of the agreement. The increase on the medical subsidy for the 2022/23 financial year will be implemented from 1 October 2022.
• An increase in the housing allowance commencing from year 2023/24 and 2024/25.
• The back-pay for the period 1 April to 30 September 2022 will be paid in two tranches – three months’ back-pay on 15 November 2022, and three months’ back-pay on 16 January 2023.

In a statement announcing the deal, Transnet said “The company’s priority in the immediate is clearing any backlogs across the port and rail system – prioritising urgent and time-sensitive cargo, and implementing recovery plans, working with industry and customers.

However, not everyone is happy as UNTU’s fellow union, the South African Transport and Allied Workers Union (SATAWU) said that it would continue to strike, saying that it sees the acceptance of a wage agreement by fellow union UNTU with Transnet as a betrayal and has asked for a higher wage increase than what was offered.

Satawu has argued for a wage increase above inflationary levels of 7.6% and in a news release, the union said “The South African Transport and Allied Workers Union (SATAWU) has learned with shock and utmost disappointment that the genuine class struggle waged by workers at Transnet SOC Ltd was betrayed on 17 October 2022. The United National Transport Union (UNTU) entered into a multi-year wage settlement agreement with the employer.

The decision in question not only disadvantages but correspondingly undermines the interests of the working-class, low-earning employees, in particular.

SATAWU has said that their industrial action should continue as planned regardless of the betrayal in question.

UNTU accounts for around 54% of bargaining unit employees at Transnet and this agreement applies to all bargaining unit employees including those who are not members of UNTU.

Costs of the Transnet strike in South Africa

While Transnet works on stabilizing operations in the wake of the deal reached, the strike action has had a devasting toll on the economy impacting South Africa’s export and import industry especially the commodities sector involving the shipment of iron, coal, and other ores which are most essential to South Africa’s economy.

The Minerals Council of South Africa had said last week that the strike is costing the mining sector alone ZAR6 billion a day and compounding on top of the ZAR50 billion already lost by previous failings.

Supply chain disruptions due to the strike have been estimated to have cost bulk mineral exporters as much as ZAR9.8 billion (USD538 million) and as per news reports, the Transnet strike has cost South Africa’s berry industry ZAR134 million a week in exports putting thousands of jobs at risk.

 

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