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 in a statement.
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 it financial position drastically a month after Transnet’s chief executive Siyabonga Gama announced on 30 October 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%," 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% salary increases every year for the next three years will result in a R8.8 billion 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% was very high, taking into consideration the current consumer price index (CPI) was 4.8%. It offered Untu members a multi-term wage agreement with a five percent salary increase for 2018, 5.5% in 2019, and six percent for 2020. Transnet was not prepared to add an additional two 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 R1300 to R1790 in 2018, R2500 in 2019, and R3500 in 2020, because the only two medical aids Transnet members could belong to had increased fees by between eight and 10% for 2018. Other points of contention included night shift and standby allowances.
Harris rejected this offer in totality, saying Transnet had resorted to "Chinese bargaining", after labour asked and gave the commitment to stick to the bottom line to ensure that an agreement was reached so that employees could get their increases as of April 1, 2018.
Transnet only wanted to "take and take benefits that Untu have fought for the past 30 years, thinking labour must agree to give up these benefits while they pay peanuts in return".
Transnet then came back to the negotiation table to put their final wage offer to labour - a 6.5 percent increase for 2018; 7.25 percent for 2019; eight percent for 2020; no retrenchments for the next three years; and no increases in any other allowances, including medical aid and housing allowances.
Untu now had until January 15 to present this offer to its members for a mandate to accept or decline the offer. If members did not accept the offer, Untu, the majority union in Transnet, would have to declare a dispute and refer the dispute to conciliation.
“If the dispute cannot be resolved and a certificate of non-resolution is issued, members will have to decide if they want to exercise their constitutional right to participate in a protected strike like we did in 2010 when our members took to the streets for an 11.5% salary increase,” Harris said.