Talks between the government and public-sector trade unions on the dispute over wages recommenced last week with the government putting a new offer on the table.
In terms of the three-year wage agreement between the parties, public servants should have received increases of between 4.3% and 5.4%, depending on their pay grade, on April 1. But the government, which is seeking to cut expenditure and slow the growth of the public-sector wage bill, has said that it cannot afford to make the increases. Instead, in March it proposed a wage freeze for 2020/21.
The parties are now in dispute and are undergoing conciliation in the public-sector co-ordinating bargaining council.
The pressure to cut the wage bill comes as government struggles to rebalance public finances away from consumption and rein in the budget deficit, which, in February, was forecast to be 6.8% for 2020/2021. At the time of the budget, finance minister Tito Mboweni said that he intended to cut the wage bill by R160bn over the next three years.
With the effect of the Covid-19 crisis, the deficit is now expected by most economists to widen to 10% of GDP.
Last week, the government increased its offer to unions to include a one-off monthly gratuity for the year, in a combination of cash and additional leave. The gratuity is calculated on a sliding scale of between 2.7% and 1.6% of the monthly wage, with an equivalent increase to employees’ leave allowance. The gratuity would not be included into the baseline of the wage, meaning that in April 2021, employers would remain on the same notch as a year earlier.
This, said unions, they were informed would come at a cost of R13bn to the fiscus.
Mugwena Maluleka, who is the head of Cosatu’s public-sector unions joint management committee, said that unions had raised a number of questions with the government negotiators, who had undertaken to reply on Friday when another conciliation hearing will be held.
“We are going back on Friday to hear what they will say. We are still engaging but clearly there are a number of problems with what they have proposed,” said Maluleka.
Conciliation is the first stage of dispute settlement. If the parties are unable to agree, the dispute is then referred to arbitration.
The National Education, Health and Allied Workers' Union (Nehawu), which is the largest public-sector health union, said on Tuesday that it would not continue with the conciliation and was ready to proceed to arbitration.
“Nehawu has taken a decision not to continue with conciliation as it has dismally failed to yield the desired results. The national union shall never allow any situation that seeks to reverse our members and workers hard-won gains,” said the union in a statement.
Trade unions affiliated to Fedusa did not attend the conciliation hearing and have said they intend to proceed directly to the labour court to have the matter heard.
A spokesperson for public service and administration minister Senzo Mchunu said on Tuesday that the government did not want to say during the conciliation phase.
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