Public service & administration acting minister Thulas Nxesi has told the country’s more than 1.3-million public servants that he contemplates implementing the contentious final 3% wage hike offer to reduce uncertainties about the fiscal outlook as time is running out ahead of the medium-term budget policy statement (MTBPS).
“This action is not contemplated lightly,” said Nxesi in a letter to the Public Service Co-ordinating Bargaining Council (PSCBC) dated October 17, which Business Day has seen.
“The matter we are seized with requires urgent action from all parties to bring to finality, to significantly reduce the uncertainties regarding both the fiscal outlook and to ensure the stability of the public service.”
Under a section in the Public Service Act, Nxesi has powers to unilaterally implement the final offer on condition that any such offer does not have the effect of reducing existing pay or other service benefits.
Invoking section 5(5)(b) of the act will take finance minister Enoch Godongwana a step closer to bringing certainty about the direction of the public sector wage bill, one of his biggest spending headaches and the containment of which underpins the credibility of his promises on fiscal policy.
But the move is likely to strain already tense relations between President Cyril Ramaphosa and Cosatu, which has marched against his government to demand action against the cost-of-living crisis, booed him off the stage in May and heckled one of his closest allies, mineral resources & energy minister Gwede Mantashe.
“Given the size and significance of the public sector wage bill and its carry-through effects on the entire fiscus framework, it is prudent for the minister of finance to include the proposed offer from government in the consolidated fiscal framework,” Nxesi said in the document, the authenticity of which was confirmed by department spokesperson Moses Mushi.
Godongwana, who is due to table the medium-term budget policy statement on Wednesday, has been trying to rein in the growth of the more than R660bn public sector wage bill to an average annual rate of 1.8%. The wage bill eats up more than a third of government spending.
The government’s latest wage offer, which is just more than one percentage point higher than what Godongwana pencilled in, has been accepted by three teachers’ unions, including the SA Democratic Teachers Union (Sadtu).
But Richard Mamabolo, spokesperson of the Police and Prisons Civil Rights Union (Popcru) — which is among the largest Cosatu affiliates to have rejected the 3% offer — said on Thursday it noted the government’s attempts to “unilaterally impose on the public service a salary adjustment offer that has been overwhelmingly rejected by majority unions”.
‘Fightback’
“We strongly warn against these tactics, and should government implement this unilateral wage offer, they would have declared war on workers, and will be subjected to an unrelenting fightback,” the spokesperson said.
Other large Cosatu unions, including the National Education, Health and Allied Workers Union and the Democratic Nursing Organisation of SA, have also rejected the revised 3% wage offer and declared a dispute at the PSCBC. The matter is set for conciliation from October 31 to November 1.
Unions demanded a 10% increase when negotiations began in May but trimmed it to 6.5% to match the headline inflation rate the Reserve Bank has forecast for 2022.
The government opened the talks by rejecting all labour’s demands, proposing a wage increase freeze before gradually revising the figure upwards with offers of 1.5% and 2% and the final 3%, including the 1.5% automatic pay progression and continuation of the R1,000 a month post-tax cash gratuity, which started in April 2021 and will end in March 2023.
Simon Hlungwani, the chief negotiator for Cosatu’s public service unions, would not answer Business Day’s questions, saying that the labour federation was planning to call a media briefing on Monday where the way forward would be communicated.
PSCBC spokesperson Oomang Parag and Nxesi’s spokesperson, Sabelo Mali, did not respond to requests for comment.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.