Transnet on Friday confirmed that it is offering voluntary severance packages (VSPs) to its management and bargaining unit employees to streamline its business and ensure the group’s long-term sustainability.

The parastatal cited subdued global economic growth, including a weak economic outlook for the local economy, as the reasons for initiating the VSP programme.

The United National Transport Union (UNTU) in response said its “worst fear” regarding Transnet had now become a reality, and would affect thousands of its members who are employed at Transnet.

“Transnet informed [our] leadership on Monday that the global growth outlook has weakened in recent months and resulted in a sharp slowdown in the demand on Transnet’s services by other developing countries.

“At the same time, the outlook for the South African economy has also deteriorated. Transnet informed UNTU that it is severely impacted because of the challenging economic conditions, with a poor forecast of improvement any time soon,” said UNTU deputy general secretary Eddie de Klerk.

The VSP process will be considered in line with business and operational requirements, including the retention of skills which Transnet may require in line with its future plans, Transnet said.

In support of employees who opt to take VSPs, Transnet will provide support services in the form of psychological and financial counselling; guidance on financial transition and a social plan which includes opportunities for enterprise development for employees who would like to pursue business opportunities.

The group expects to conclude the process at the end of April.

“In terms of a multiterm collective agreement Transnet signed with UNTU earlier, the company cannot force retrenchment until the end of the next financial year, ending March 31, 2018,” said UNTU.

UNTU further urged its members to remain in employment for as long as possible, with the “grim economic situation as it is”.

De Klerk said individual members needed to carefully consider whether they could afford taking VSPs, if they would be able to find alternative employment or start up their own business to sustain their income and if they have saved enough money to survive an early retirement.