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South Africa’s Transnet Agrees to Three-Year Wage Deal With Majority Labor Union

Published: October 17, 2022
Workers at South Africa's state-owned logistics firm Transnet demonstrate for a second week outside the Port of Cape Town as they continue on a nationwide strike action that could paralyse ports and freight rail services in Cape Town, South Africa on October 17, 2022. (Image: REUTERS/Esa Alexander)

(Reuters) — South African state-owned logistics firm Transnet said on Monday, Oct. 17 that it had agreed a three-year wage deal with the union representing the majority of its workers, ending a two-week strike that had hit commodities exports and piled up millions in losses.

“Transnet and the company’s majority union United Transport and Allied Trade Union (UNTU) reached a three-year wage agreement today,” it said in a statement, adding the deal would bring most of its employees back to work.

UNTU members, who represent more than half of the company’s workforce, went on strike on Oct.6, demanding an increase linked to South Africa’s year-on-year inflation rate, which was 7.6 percent in August.

Transnet workers protest as a labour strike continues at an entrance to the harbor in Durban, South Africa on October 17, 2022. (Image: via REUTERS/Rogan Ward)

Transnet said it had agreed on a 6 percent wage increase for the current financial year, a 5.5 percent raise next year and a further 6 percent boost in 2024. The deal is effective from April 2022, it said.

“The company’s priority in the immediate is clearing any backlogs across the port and rail system – prioritising urgent and time-sensitive cargo,” Transnet said.

UNTU officials were not immediately available for comment.

A spokesperson for the South African Transport and Allied Workers Union (SATAWU) told Reuters the minority union had not yet agreed to a deal with Transnet.

The strike has hobbled Transnet’s freight rail and port operations including the Durban harbour, one of Africa’s busiest, impacting mineral and agricultural commodity exports.

Last week, the Minerals Council of South Africa said mining companies were losing 815 million rand ($45.27 million) per day in export revenue due to the strike, as major mineral export harbors were operating at between 12 percent and 30 percent of their daily averages due to the strike.

The strike also affected the horticulture sector as fruit exporters struggled to send produce to overseas markets.

By Reuters. (Reporting by Nelson Banya in Harare; Editing by Promit Mukherjee, Matthew Lewis and David Evans)