The Labour Appeals Court is set to hear arguments on December 2 between public sector unions and the government over the government’s failure to implement a wage increase agreement. The ruling will set a legal precedent and have big political ramifications.
The government agreed in 2018 to grant public service workers above-inflation wage increases over a three-year period. Now, it is pleading poverty, arguing it cannot afford this year’s increases.
It has used many excuses to support its attempt to renege on the deal with the unions, which are pushing back hard — especially the National Education, Health and Allied Workers Union (Nehawu), which is in an alliance with the ANC. Among the many excuses the government has invoked are: the recession, multiple credit rating downgrades and, of course, the advent of Covid-19.
It is significant to locate this dispute in its proper political context to decipher what the government, specifically the National Treasury, is trying to achieve.
Over time, the ANC has veered away from its founding struggle values, which drew millions of South Africans, most of whom are not even card-carrying members of the party, to support it. It has consequently lost support across the board: for three electoral cycles it has failed to win and run the Western Cape and City of Cape Town, and in 2016 it lost control of the Nelson Mandela Bay and Johannesburg metros (only to regain the latter after a split in the DA) and Tshwane (which returned to DA rule last week after a high court ruling that overturned the Gauteng government’s decision to place the nation’s capital under administration).
The governing party has bled electoral support mainly to Julius Malema’s EFF, which split from the ANC and took with it the ANC Youth League machinery and support, especially in urban areas and among private sector professionals. Like Zimbabwe’s governing party, Zanu-PF, the ANC has been reduced to a rural party of the poor.
It owes its remaining support to the following classes:
- the rural and urban poor, who are unemployed and rely on social grants;
- the small but influential and wealthy tenderpreneur class, which relies on state procurement; and
- the public sector unions, which form the core of what is left of labour federation Cosatu.
When he was fired as Cosatu general secretary, Zwelinzima Vavi walked away with its industrial unions, most importantly the militant National Union of Metalworkers of SA (Numsa) to start the SA Federation of Trade Unions (Saftu). Joseph Mathunjwa’s Association of Mineworkers and Construction Union (Amcu) snatched most of Cosatu’s disgruntled mineworkers.
After ousting Jacob Zuma as president, President Cyril Ramaphosa promised to reconfigure (read reduce the size of) the government. Cutting the size of his cabinet would have given him ammunition to tackle the next biggest challenge: reducing the size of the civil service. It is common cause that this project failed. The government is now talking about even more ineffectual measures to reduce the civil service.
So what is the government’s end game with the court case? It now finds itself in an uncomfortable spot. It has to raise capital to finance the gap between dwindling tax revenues and rising spending, while reading the score on the political calculus.
Funders of capital want to see a credible plan to rein in unnecessary spending. None is on the table. Cutting the public sector wage bill (over time) is a blunt instrument. And, of course, SA is due to hold local government elections next year.
Banana republic
Realising the significance of the dispute, the registrar of the labour court has allowed the matter to be heard in the Labour Appeals Court as a court of first instance, and granted an early date.
It’s hard to imagine how a court can endorse one arm of the state — the government — reneging on an agreement. That would be tantamount to approving a descent into a banana republic.
There are indications of what might happen. The decision to save SAA, which has no macroeconomic implications, wasn’t an economic one; it was a political decision to allay the concerns of ANC allies that it is about to openly embrace privatisation. The Treasury apparently had no qualms cutting socioeconomic spending amid a pandemic.
Ominously, it has signalled its commitment to honour the court ruling. But if it knows it will lose, why the need to challenge the matter in court? Which public services will it sacrifice to fund the commitment to honour a court-ordered agreement and please funders?
With a high court order in hand, the Treasury will stop all pretence that it has been implementing a stimulus package — it will feel emboldened to openly impose austerity measures in February’s budget. Public servants (who will be accused of all sorts of crimes, including greed) — not the failure to spend public resources effectively and efficiently on appropriate socio-economic programmes — will be the scapegoats.
Meanwhile, talking tough, but doing little, about corruption and wasteful and fruitless expenditure will continue as the economy struggles along in its low-growth rut.
• Dludlu, a former Sowetan editor, is CEO of the Small Business Institute.
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