Transnet and UNTU Reach Multi-Year Wage Agreement After Prolonged Dispute

JOHANNESBURG – After months of tense negotiations and a looming threat of industrial action, Transnet and the United National Transport Union (UNTU) have signed a multi-year wage agreement that marks a significant turning point in labor relations at the state-owned ports and rail operator.

The long-standing dispute between Transnet and UNTU stemmed from disagreements over wage increases. UNTU, which represents the majority of workers at Transnet, had initially demanded a 10% salary increase in a single-year agreement. The demand was rejected by the company, citing financial constraints and the need for long-term stability amid an ongoing turnaround strategy.

Earlier this year, Transnet reached a separate deal with the minority union, SATAWU (South African Transport and Allied Workers Union), offering a phased increase — 6% in the first year and a cumulative 11.5% over the following two years. This agreement, however, did not satisfy UNTU, which chose to continue its fight through a parallel negotiation process.

On Thursday, Transnet and UNTU finally reached a compromise with a new agreement that supersedes the prior arrangement made with SATAWU. Under the terms of the new deal, workers will receive a 6% wage increase annually for the next three years — a settlement viewed by both parties as a fair middle ground.

UNTU spokesperson Atenkosi Plaatjie praised the role of the Commission for Conciliation, Mediation and Arbitration (CCMA), which played a key role in resolving the impasse.

“UNTU acknowledges the role of the CCMA as the highest dispute resolution body, which intervened to avert industrial action that would have derailed Transnet’s recovery and turnaround plan and collapsed an already fragile South African economy,” said Plaatjie.

Economic and Operational Implications for Transnet

The conclusion of the wage negotiations is a critical milestone for Transnet, which has been working to stabilize its operations and improve its financial health. Over the past few years, the company has faced mounting challenges, including underperformance in its rail division, delays at ports, and infrastructure sabotage.

The threat of industrial action had raised concerns about potential disruptions to South Africa’s already struggling logistics network. Strikes would have affected key sectors such as mining, manufacturing, and agriculture — all of which depend on Transnet’s freight rail and port services for the movement of goods.

By reaching an agreement with UNTU, Transnet avoids a costly strike and gains a measure of labor stability that is crucial for implementing its long-term recovery and modernization strategy.

For UNTU, the new wage deal is being hailed as a victory for organized labor and a demonstration of the power of collective bargaining. Despite not securing the initial 10% demand, union leaders say the three-year 6% increase provides predictability and ensures workers do not fall further behind inflation.

“We consider this agreement a win, not just for UNTU, but for every worker at Transnet,” said Plaatjie. “This outcome proves that constructive engagement, even under pressure, can deliver results without jeopardizing essential services.”

Analysts in the transport and logistics sector see the agreement as a step forward, though they warn that Transnet must follow up the labor resolution with operational improvements. The company’s performance has been under scrutiny from stakeholders, particularly in the export-heavy mining industry, where rail inefficiencies have affected coal and iron ore shipments.

“The wage agreement provides breathing room,” said Thabo Mokoena, an independent transport economist. “But Transnet must now focus on restoring efficiency and ensuring the wage increases are matched by productivity gains. Labor peace is only part of the equation.”

Transnet’s turnaround plan includes several initiatives aimed at improving performance, attracting private-sector investment, and upgrading its rail and port infrastructure. With the wage dispute resolved, management is now expected to accelerate the rollout of strategic reforms.

Key priorities include:

• Revitalizing aging rail infrastructure
• Addressing equipment shortages at ports
• Combating cable theft and vandalism
• Opening up certain rail corridors to private operators

The multi-year wage agreement gives Transnet the certainty it needs to plan for the medium term without the distraction of annual labor disputes.

The new wage settlement between Transnet and UNTU marks a significant development in the ongoing efforts to stabilize one of South Africa’s most important state-owned enterprises. By averting a strike and ensuring a consistent wage structure for the next three years, the company now has the opportunity to rebuild trust, improve service delivery, and focus on its core mission — moving the economy forward.

With labor peace secured, all eyes are on how Transnet will leverage this opportunity to deliver meaningful improvements in its operations, restore stakeholder confidence, and fulfill its mandate as a reliable backbone of South Africa’s transport and logistics sector.

Source- EWN