Cosatu scuppers wage agreement

Cosatu took its Nedlac counterparts by surprise on Tuesday, putting the brakes on a minimum wage deal that everyone thought was in the bag.

As a result, the signing ceremony meant to be presided over by President Jacob Zuma and his deputy Cyril Ramaphosa was postponed indefinitely.

Cosatu said it needed to report back to its central executive committee on February 27 before signing, depriving Zuma of an opportunity to gloat at Thursday’s state of the nation address.

After more than two years of negotiations and research, it has emerged that the federation remained uncomfortable with three issues that it believed had not been dealt with adequately in the agreement.

These include the issue of working hours, the annual increase in the minimum wage and medium-term targets.

It is understood that without a comprehensive package that includes these elements, the R20-per-hour minimum wage would be meaningless.

The decision to pull out of the signing ceremony is said to have been made during a meeting of Cosatu’s national office bearers

on Monday. The meeting felt the agreement did not take forward demands on the minimum wage that Cosatu had made at its last central executive committee meeting in November.

It is understood that in the “dying hours of the negotiations” last week, the issues Cosatu felt were not dealt with adequately were left to a task team.

At its November meeting, Cosatu described the R3,500 per month proposal by a panel, initiated by Ramaphosa, as a “significant starting point”.

It is understood the R20 per hour level was not a concern for Cosatu — it had compromised and accepted this figure.

However, the agreement did not say by how much the minimum wage would increase annually. Cosatu wants a clear schedule of upfront, agreed upon targets for annual inflation increases for three years.

The agreement in its current form says the wage commission will adjust the amount annually by considering a number of factors including inflation, productivity and GDP growth.

A proposal brought by Cosatu for a medium-term target for the national minimum wage was also left open-ended, and up to the mooted wage commission. The federation was also worried by a proposal that the commission should work on the basis of consensus between business and labour, which could result in paralysis.

Minimum working hours are another sticking point for Cosatu. The current agreement says the advisory panel will conduct an assessment of job losses of setting the minimum working hours at 4, 5 or 6 hours, respectively. Cosatu wants minimum working hours of 6 hours and it proposed a premium payment for short-time workers.

But there was also an element of political manoeuvring in Cosatu’s last-minute hesitance.

Insiders said it was unfair the process had to be rushed to ensure that Zuma could make an announcement about it in his state of the nation address.

Cosatu has thrown its weight behind Ramaphosa in the ANC’s succession race to be decided at the party’s elective conference in December.