Public service pay rises 7%, with index-linked increases in later years

PUBLIC servants will receive a 7% salary increase after trade unions and the state signed a three-year pay settlement last night, the Department of Public Service and Administration said.

While Finance Minister Pravin Gordhan had budgeted for a 5% wage hike, unions entered negotiations demanding 10%.

The state’s last informal offer of 6.9% already increased the wage bill by about R8bn.

Last night’s settlement brings to an end the protracted and at times acrimonious negotiations, during which a new minister took the helm of the ministry.

Lindiwe Sisulu stepped in after the death of previous minister Roy Padayachie. The talks began on February 16.

The three-year agreement stipulates that public servants would receive a 7% increase for 2012, and from 2013 to 2015, workers would receive the consumer price index plus 1%.

The 7% increase would be backdated to May, and would apply until March 31 next year. The following year’s pay progression takes effect from April 1 2013 and April 1 2014 respectively.

“The agreement indicates what is possible when parties join hands to solve challenges,” Ms Sisulu said. “This three-year agreement allows for the employer and labour to implement all elements of the agreement. The three years are also in line with the government planning cycle and ensure proper planning.”

The deal comes after Congress of South African Trade Unions (Cosatu) affiliates declared a dispute with the state last month, accusing it of backtracking on a 6.9% offer. The process then went to arbitration where a facilitator, advocate Luvuyo Bono, came up with the proposal of a 7% increase. All parties accepted the facilitator’s proposal.

Cosatu’s chief negotiator, Mugwena Maluleke, described the negotiation as “the most difficult in years”. This was due to parties having to deal with pay and 14 issues ranging from housing to pay progression.

A further “complication” was Mr Gordhan’s pronouncement of a 5% increase. “That makes a mockery of negotiations, giving a final increment before the process begins,” Mr Maluleke said.

Despite having accepted the proposal, Mr Maluleke said unions “gave in” on the housing allowance and the date of implementation of the agreement.