The warning raises the question of whether Transnet can afford salary increases for more than 46,000 employees
There might be light at the end of the tunnel in the wage negotiations deadlock between Transnet and the United National Transport Union (Untu), as a revised offer has been put on the table.
The Union representing the majority of Transnet workers has stated multiple times that it would not mind bringing the already-struggling entity to its knees if its members do not receive the salary increase they deserve.
Untu had promised that its members would down tools on Thursday if the Commission for Conciliation, Mediation and Arbitration (CCMA) had not sent a revised salary offer. CCMA delivered the revised offer on Tuesday, instead of Monday, as the union had requested.
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Offer delivered by Transnet
The cost of living is high for the middle and lower classes of South Africa, and salary increases are justifiable. However, some companies, such as Transnet, are already struggling to maintain operations. Are salary increases that match the cost of living possible?
Transnet offered a salary increase of 6% this year, 6% in 2026, and 5.5% in 2027. Untu is demanding a 10% wage increase, as well as housing and medical subsidies.
The union representing the minority of Transnet workers, the South African Transport and Allied Workers’ Union (Satawu) accepted the offer by the cash-strapped entity. The entity previously stated that the increase is effective as of 1 April 2025, and since Untu did not accept the offer, its members were not eligible for the increase.
Offer put on the table by CCMA
The revised offer made by CCMA, following the facilitation of the S150 process between the entity and Untu, is for the next three years.
“The proposed agreement will apply to all bargaining unit employees as defined in the Transnet Bargaining Constitution,” said Untu spokesperson, Atenkosi Plaatjie.
The offer is a three-year agreement that will commence on 1 April 2025, and will end on 31 March 2028. Each year, all Transnet employees will receive a 6% increase.
Plaajie said it is now up to Untu members to either accept or reject the offer made by the CCMA. If the majority of the members accept the offer, the leaders will sign the agreement, which will be binding for all employees.
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What about the strike?
She added that, should the majority of the members reject the offer, the leaders will issue a strike notice to Transnet, as previously mandated by their members through a balloting process.
“Employees in the Bargaining Unit who had not received the wage adjustment on 1 April 2025, will receive such adjustment from the June 2025 pay-month, backdated to 1 April 2025.
“The modus of calculation and payment period must be determined by agreement between the parties, similar to the previous wage agreement.”
Transnet also committed to no mandatory retrenchments over the three years outlined in the tabled proposal.
“The Parties must revert to the Commissioners by 10 June 2025,” added Plaajie.
Will government bailout Transnet?
Moody’s Ratings has warned that the state-owned logistics company, Transnet, could run out of money in the next three months.The warning raises the question of whether Transnet can afford salary increases for more than 46,000 employees
Moody’s provides data, intelligence, and analytical tools to help business and financial leaders make informed decisions. The warning that Transnet could run out of money within the next three months could intensify pressure on the government to initiate a financial rescue.
The ratings agency believes Transnet needs further government support to refinance upcoming debt maturities and secure funds for its expanded capital expenditure programme.
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