In terms of the wage deal, the South African Transport and Allied Workers' Union (Satawu) and United Transport and Allied Trade Union said Tuesday, 7 July 2009, the company had offered a 7% across-the-board wage hike.
They said that Transnet also undertook not to “forcefully retrench” Transnet employees.
Transnet spokesman John Dludlu confirmed yesterday that it reached the wage agreement with the unions at the end of last month.
This settlement comes at a particularly difficult time for Transnet, which faces dwindling volumes and the recession.
It also poses a challenge to the company's attempt to reduce working capital and cut costs as the group rolls out its five-year capital expenditure plan, which has four years to go. Dludlu said the 7% wage increase would cost about R750m.
He said this wage settlement did not concern the company in that it would not add to cost pressure. This latest wage expense, he added, had largely been budgeted for.
Transnet said recently labour costs represented about half of the group's total costs, which stand at R20bn.
“We believe that this is a balanced and fair deal given the performance of the company under the prevailing economic conditions,” said Dludlu, adding the company had managed to find a settlement without a strike.
Randall Howard, general secretary of Satawu, said the wage deal averted a strike that would have disrupted Transnet's operations.
“It is a deal we can live with. We are not over the moon,” Howard said, noting that Transnet initially offered a 0% increase in exchange for protecting jobs.
He said wage talks were difficult against the backdrop of the country's recession.
Source: Business Day
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