Recently Transnet CEO Maria Ramos resolved a nine-month dispute with four striking transport unions that threatened to derail the restructuring of the transport parastatal.
The unions decried her unilateral efforts, but the agreement reached this week largely keeps her reform agenda on track with the difference now that the unions are on board as part of the process.
Reforming the transport sector is a key part of the government’s Accelerated and Shared Growth Initiative for South Africa programme designed to drive greater economic growth in the country.
Analysts say Ramos’s confrontation with labour was the outcome of the parastatal’s lack of consultation as Ramos fulfilled her mandate to implement a four-point turnaround strategy.
The strategy involves Transnet redirecting business, restructuring the balance sheet, introducing strict governance and improving risk-management in a company that reported a R6,3-billion loss in 2004.
“Turnaround CEOs are never popular or meant to do popular things. They are meant to do things which are complex and difficult and Maria has done extremely well,” said Iraj Abedian, CEO of Pan-African Advisery Services and director at Transnet, who added that an efficient Transnet was critical to economic growth in the medium term.
Ramos’s lack of popularity flared during the nine-month dispute when the CEO, who is more used to appellations like “business leader of the year”, suffered the title “Maria Gemors”.
Yet the South African Transport and Allied Workers’ Union (Satawu), which signed this week’s agreement, said that restructuring Transnet was necessary to enable it to play a developmental role in the economy.
“We recognise that it makes a lot of sense for Transnet to have a clear focus,” said Satawu’s policy researcher, Jane Barrett, who said that its key complaint with Transnet was the lack of a consultative restructuring process.
While Tuesday’s agreement saw Ramos give in to labour’s demands on more cooperative restructuring, Ramos did not meet all of the unions’ demands regarding the restructuring conditions. She also plans to complete the process by the end of the year.
Metrorail, Transnet Group Audit Services and Transnet Pension Fund Administration Property Trust have already exited Transnet, according to the agreement.
Shares in V&A Waterfront, Equity Aviation, VAE Perway, Connex and SA Express will be sold in the period leading up to December 31 2006.
A separate consultation process has been set up to deal with the companies, Freightdynamics, Viamax Fellt Management and Viamax Fleet Solutions, on the understanding that they will exit Transnet in 2006.
While Barrett said that the unions had “given the nod” to privatisation of the latter two units, she said that there could still be a dispute over the privatisation of Freightdynamics.
She said that the government agreed to review the privatisation decision regarding Autopax, which was earmarked for sale last year.
Despite the joint commitment to continue restructuring Transnet, Barrett said that the agreement was a victory for labour. “We would definitely see it as a victory in the sense that, through the strike action, management was forced to concede that it was not consulting properly,” she said.
“This is more of a political battleground than a labour battleground,” said Marco MacFarlane, a researcher at the South African Institute of Race Relations, adding that, “In the end, all that has been proved is that the unions do have the power to affect these decisions. The bottom line is that Transnet did not adequately consult them in the beginning.”
The 18-page agreement begins by stating the importance of “consultation on all issues that impact on employees, which is characterised by mutual respect, transparency and consensus-seeking.” It adds that, “unilateralism and lack of proper consultation undermine labour relations”.
As a long-term measure to ensure consultation, the agreement establishes a strategic leadership forum in which union leadership and Transnet executives will engage on Transnet strategy four times a year.
The restructuring process was announced mid-2005, when Ramos, said that the parastatal would focus on its railways, ports and pipeline businesses and sell or transfer non-core entities within the next 18 months.
The four unions in the sector, Satawu, the United Transport and Allied Union, the United Association of South Africa and the South African Railway and Harbour Workers’ Union have staged rolling protest strikes over Transnet’s restructuring plans.
The unions argued that restructuring would affect job security and working conditions of 30 000 workers.
They demanded that Transnet guarantee employment for five years and protect pension arrangements for employees in business units that were sold or transferred during the restructuring process.
In terms of the agreement, Transnet will “do everything possible to minimise and avoid compulsory retrenchments” and guarantee jobs in Metrorail for 18 months after the entity is merged with the South African Rail Commuter Corporation.
Labour and management also agreed that workers within entities that remain state-owned enterprises will stay within the Transnet Pension Fund.
This provision will apply to South African Airways and Metrorail, said Ramos, and will require an amendment to legislation concerning pension and retirement fund rules.
South African Airways will be transferred under the supervision of the Department of Public Enterprises.
Transnet will not specify the conditions of employment of workers in business units that are sold or transferred but in terms of Section 197 of the Labour Relations Act, it will ensure that they are no less favourable than current conditions.