Transnet makes final wage offer
- Published on 5 Dec 2017
- HR Pulse News Desk
Transnet shocked labour by firstly putting a very low opening offer on the negotiation table at the Transnet Bargaining Council and replacing it with a final wage offer after labour declined to accept it.
Both offers of Transnet is based on the fact that the rating agency, Standard and Poor, downgraded Transnet on 28 November 2017 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%.
Gama also assured UNTU in front of a full house at the Transnet Indaba, held on 23 October 2017 at Esselenpark, Johannesburg, that voluntary severance packages won’t even be on the table as the company intends 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 cost 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 increases 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.
The company then started its wage offer by saying that labours demand of 12% is very high, taking into consideration that the current consumer price index (CPI) is 4,8%. It offered members of the United National Transport Union a multiterm wage agreement with a 5% salary increase for 2018., 5, 5% salary increase for 2019 and a 6% increase for 2020.
The company was not prepared to add an additional 2% wage increase for those employees earning less than R100 000 per annum. Transnet believes that its entry level wages are very favourable in the market and above the minimum wage.
Transnet was not prepared to increase its medical subsidy or housing allowance to more than the agreed wage percentage. Labour demanded that both must be increased from the current R1 300 to R1 790 in 2018, R2 500 in 2019 and R3 500 in 2020 since only two of the medical aids to which Transnet members can belong to, has increased its contributions by between 8% and 10% for 2018.
Transnet proposed that the night shift allowance and the standby allowance must increase by the agreed percentage of the wage increase, but is not prepared to increase any other allowances. The company is still not prepared to increase the R213 of its medical contribution to pensioners, at all.
Steve Harris, General Secretary of UNTU, rejected this offer in totality stating that Transnet has resorted to Chinese bargaining, after labour asked and gave the commitment to stick to the bottom line to ensure that an agreement is reached so that employees can get their increases as of 1 April 2018. The company only want to take and take benefits that UNTU have fought for the past 30 years, thinking labour must agree to give up these benefits, whilst they pay peanuts in return.
After Tumelo Mokoena, Transnet General Manager Human Capital, intervened and had a telecon with Gama, the company came back to the negotiation table to put their final wage offer to labour. The company stated this offer was put together by playing around with their allocated wage budget. They only shuffled their offer around, but added no monetary value to it. Transnet said was confined to what it could offer.
The FINAL WAGE OFFER is:
• 6,5 % for 2018;
• 7, 25% for 2019;
• 8% for 2020;
• No retrenchments for the next three years;
• No increases on any other allowances, including medical aid and housing allowance.
UNTU now has until 15 January 2018 to present this offer to its members so that most of our members can give the Union a mandate to accept or decline the offer.
Harris says if members does not accept the offer, UNTU, the majority Union in Transnet, will have to declare a dispute and refer the dispute to Conciliation .
