Prasa locomotive. Picture: PRASA
Prasa locomotive. Picture: PRASA

The United National Transport Union (Untu) says it is reviewing a decision by the labour court to dismiss its urgent application to compel cash-strapped rail operator Prasa to implement a 5% wage increase that was agreed to with unions in 2020.

In dismissing the application recently, the court said the union had failed to explicitly set out why the implementation of the salary increase was considered urgent.

In October 2020, the Passenger Rail Agency of SA (Prasa) signed a wage deal that gave its workers a 5% salary increase each year for three years. The deal was struck with Untu, which represents the majority of the estimated 17,000 Prasa employees, and the SA Transport and Allied Workers Union (Satawu). 

Prasa implemented the first leg of the three-year wage agreement in December 2020, backdated to April 1 2020.

In May, Untu placed Prasa on terms to implement the second leg of the wage agreement after it failed to do so at the end of April 2021.

The struggling rail operator, which has had five turnaround strategies implemented since its creation in 2009, registered irregular expenditure of R28.6bn in 2019/2020, which was mainly due to contravention of supply chain management principles.

Prasa is among state-owned enterprises ravaged by corruption and malfeasance linked to state capture. It received a disclaimer from the auditor-general in 2019 and again in 2020 — the worst possible audit outcome.

Prasa CEO Zolani Matthews, giving an update on his 100 days in office recently, said the entity had engaged with the department of transport to request assistance in honouring the wage agreement. Prasa has said it was committed to implementing the wage agreement, but it had no money to do so.

Untu general secretary Steve Harris told Business Day on Thursday: “The company says it’s not reneging on its responsibility, and is seeking funds from the transport department and Treasury. We understand [where they are coming from] but you can’t enter into an agreement and then find yourself in a position where you can’t pay.”

Harris said Untu was pursuing the matter through the labour court.

Ayanda Allie-Paine, spokesperson for transport minister Fikile Mbalula, referred questions to department of transport spokesperson Tshegofatso Maake, who did not respond to queries sent to him.

Prasa spokesperson Bane Ndlovu did not respond to a request for comment.

mkentanel@businesslive.co.za

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