Stage set for bitter fight over public sector pay
The stage has been set for a bitter clash between the government and public sector unions, with the latter meeting today to iron out sticking points in their demands for above-inflation wage increases and the state having budgeted for a freeze.
The Treasury has said its approach to future negotiations will be to ensure the outcome aligns with both the country’s fiscal position as well as prevailing economic conditions, which does not augur well for workers receiving salary increases in the coming years.
The new public service wage demands are due to be tabled later today, which will start what is expected to be an arduous negotiating process.
A new wage agreement is supposed to take effect on April 1, but as in previous years negotiations are unlikely to be complete by then, especially since the Treasury has hinged its entire medium-term budget on forging ahead with huge cuts to the wage bill, which will amount to a pay freeze.
Business Day has confirmed with both Mugwena Maluleke,
chief negotiator for the Cosatu public sector unions, and Reuben Maleka, spokesperson for the Public Servants Association (PSA), that unions that are members of the Public Service Co-ordinating Bargaining Council are set to meet this morning to reach consensus on their demands, which will then be submitted to the bargaining council.
It is understood that the biggest sticking point is whether increases should be on a sliding scale, with different salary increases for different salary bands, or one increase across the board. One well-placed source said the proposed sliding scale is for an increase of the change in the consumer price index (CPI) plus four percentage points on the lower salary bands, and CPI plus two points on the higher salary bands.
The across-the-board proposal would see a demand of CPI plus two percentage points for all salary bands. The latest CPI put inflation at 3.2% in January, but the Treasury is predicting it will average 3.9% during 2021.
Maleka said the PSA considered a “CPI plus two” increase for the coming year to be “reasonable” and “affordable”, and did not support a sliding scale since it did not want to divide workers from the outset.
However, the unions agree they want to negotiate a singleyear agreement. This is because they were burnt by the state last year when it refused to implement the final year of the last multi-term wage agreement.
A multiyear wage agreement is important for the state as it ensures labour stability over the medium term. However, it refused to pay increases provided for in the agreement because it said it did not have the money to do so. This resulted in unions taking the government to court. The court sided with the state, declaring the agreement unlawful as the Treasury did not commit the funds to pay the R37.8bn required for increases in the current financial year.
The court case had the effect of pushing back the negotiations, as it was concluded only late last year. The unions have also taken the decision by the labour appeal court on appeal to the Constitutional Court and a judgment is pending.
However, the saga has left a huge dent in the trust relationship between the government and state employees, which will be felt when the parties meet at the negotiating table. While the Budget Review is clear on a salary freeze over the coming years, finance minister Tito Mboweni’s comments in his budget speech have been interpreted to mean that the government is open to negotiation.
Mboweni said public service & administration minister Senzo Mchunu was working with organised labour to achieve a fair public sector compensation dispensation when negotiations begin later in the year.
Maleka said Mboweni’s comments meant the government comes to the table with empty hands without provoking conflict with the unions.
THE PSA CONSIDERED A ‘CPI PLUS TWO’ INCREASE FOR THE COMING YEAR TO BE ‘REASONABLE’