Public sector wage talks, in which considerable progress had been made prior to the tabling of the budget, have begun to falter as unions say they may need to rethink their positions.
VAT and fuel levy hikes announced in the budget have angered unions, which believe this will hit the poor and working class hardest.
Cosatu’s joint mandating committee chairman, Mike Shingange, said labour’s perspective had been affected by the recent VAT and fuel levy increases and they now had to measure the impact of the increases on inflation and adjust their demand accordingly.
"We have a revised mandate. We have always said our members must be combat-ready. We are waiting for the minister to come back to the negotiations table…. The settlement is supposed to start on April 1 when a three-year deal comes to an end on March 31. We were chasing that deadline," he said.
But containing the public sector wage bill is essential to rebalancing government spending. Bill projections written into last month’s budget assume that growth will be held to 7.3%. This leaves very little wiggle room for negotiations other than a wage increase in line with consumer inflation as other parts of the package usually account for a 2% growth in the wage bill.
President Cyril Ramaphosa had been personally engaging with unions prior to the budget.
Newly appointed Public Service and Administration Minister Ayanda Dlodlo told Business Day on Friday she would meet with public sector union leaders to assure them that wage negotiations would not be "unnecessarily derailed" by the leadership changes in the Cabinet.
Departmental spokesman Dumisani Nkwamba added that the minister remained committed to the Public Service Co-ordinating Bargaining Council process "that will bring about an outcome that will be acceptable to all parties involved".
Several critical conditions of service issues in the draft agreement had been concluded by the time Dlodlo took office, with the exception of the sticky point of salary increases.
Union leaders said positive progress had been made since the government offered to hike pay for employees on levels one to seven by the consumer price index (CPI) plus 1.5%; levels eight to 10 by CPI plus 1% and levels 11 and 12 by CPI only for the first year of the three-year deal.
But they were anxious about the direction that the budget had taken and wanted to get back to the negotiating table.
In January workers demanded salaries be increased by CPI plus 3% for the lowest levels, with a 2% adjustment for levels eight to 10 and 1% for 11 and 12.
The Public Service Association said members had mandated it to take to the streets if the salary negotiations did not work out.
However, they were still open to working with the new ministers if they prioritised partnership and do not treat workers’ representatives as opponents, according to general manager Ivan Fredericks.
The parties had already agreed to establish a housing scheme for public servants that would be established by the Public Investment Corporation, a bursary scheme for children of public servants and more leave days for surrogate parents.
However, of great significance was the agreement to de-link the spousal clause in the payment of housing allowances that had since apartheid limited the benefit to only one partner of a married couple.
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