South Africa's United National Transport Union (UNTU) has served a 48-hour notice on the country's major terminal operator Transnet, indicating the union's intention to embark on strike action from 6 October at 00:01 am (local time).

UNTU claims that Transnet has delayed salary negotiations for months and has still not made a "reasonable offer" to its employees.

Transnet opened their salary negotiation proposals at 1% across the board (ATB) for all employees, according to UNTU, while none of the other proposals from labour was considered. "These proposals included, amongst others, increased housing allowance, shift allowance, medical aid allowance and no retrenchments," noted the union.

Labour said it proposed a three-year salary increase agreement, but after three rounds of negotiations, Transnet barely changed their proposals and only moved slightly on "non-significant allowances" such as shift allowance and standby allowances but maintained their 1% across the board (ATB) increase.

Subsequently, a deadlock was reached by the parties, and a dispute was declared.

After two days of conciliation, Transnet proposed their final offer which again did not address the material aspects of a CPI related increase across the board, medical aid allowance increase and housing allowance increase, according to UNTU, and a certificate of non-resolution was issued on 25 August 2022.

After UNTU's warning of pending industrial action notice, Transnet requested a meeting with Labour and eventually provided Labour with a revised salary proposal on 3 Oct 2022, which included an increase of 1.5% on some of the elements of remuneration effective from 1 October 2022, backpay for the period 1 April 2022 - 30 September 2022 which will only be paid in January 2023 onwards in three equal “instalments” at the end of January 2023, end of February 2023 and end of March 2023 and such would be pro-rated for employees that started after 1 April 2022, ex-gratia lumpsum at the end of April 2023 of R10,000 (US$567) before tax and one-year agreement.

UNTU rejected Transnet's pay offer, describing it as an "insult to our members who have put everything on the line to help get this company back on track."

On the other hand, Transnet believes the new offer is fair and reasonable given the current financial and operational challenges, adding that it is "the best possible deal that can be made right now".

The port operator wrote, "Transnet has consistently made the point that its wage bill currently makes up over 66% of monthly operating costs. This is not sustainable, particularly given the current operational and financial performance.”

UNTU said in a statement, "Embarking on protected industrial action is always a last resort, however, it is a right that UNTU Members have decided to exercise due to the fact that the salary increase offer that Transnet has provided is completely misaligned with our members needs and the rising cost of living."

"Transnet and its shareholders (who is Government by the way) must provide a salary increase offer that is aligned with the increased cost of living, cost of housing, medical costs, housing and, of course, CPI that is currently running at 7.6%," added the union.

Separately, the South African Transport and Allied Workers Union has announced it will also strike from 10 October, after rejecting the same offer.

Transnet stated on 4 October that it has applied to South Africa's Commission for Conciliation Mediation and Arbitration (CCMA) to convene conciliation discussions over the current wage negotiations.

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