File image: IOL.

CAPE TOWN - Thousands of Transnet pensioners scored a major victory yesterday when the Constitutional Court gave them the go-ahead to recover billions of rands from the freight, rail and logistics giant as well as the Transnet Second Defined Pension Fund and the Transport Pension Fund.

The court gave Transnet and the pension funds 20 days to respond to the claim, which is estimated at R80 billion.

The ruling brought to an end an ongoing legal wrangle between Transnet, the two pension funds and the approximately 60000 former workers who took the company to court in 2013 over pension payouts.

Richard Carr, one of the pensioners and co-founder of the Transnet Pension Action Group, said the Constitutional Court's decision paved the way for the matter to go to court. Carr said the amount could be higher now.

He said Transnet had raised an exception to the pensioners’ claim in 2013 when the matter was about to be heard in court. Carr, however, said the pensioners were open to an out-of-court settlement of the matter. “Our goal is to get Transnet to pay what is due to us. Any further delay in this matter is not in our interest,” he said.


In their claim the pensioners argued that there was a 1989 undertaking by the parastatal’s predecessor, South African Transport Services (Sats), that they would receive the same pension benefits under a commercial entity Transnet as they did under Sats and its two pension funds.

At the time, Sats said the practice of annually increasing members’ pensions by at least 70% of the rate of inflation would continue.

“Transnet and the new pension funds kept the promise until 2002 by granting annual pension increases of about 80%, on average, of the rate of inflation. Since then, they have broken the promise,” the judgment said.

The pensioners’ case rests on three claims - that the funds increase the pension benefits by at least 70% of the rate of inflation with effect from 2003; that Transnet pay a R17.1bn plus interest “legacy debt” to the funds; and that the court render unlawful and invalid an undertaking by trustees of the Transport Fund to donate 40% of its members’ surplus to Transnet. The pensioners allege that the donation is unlawful and want Transnet to pay R309million plus interest.

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