Do-or-die scenario as public sector wage talks hit a brick wall

A WAGE dispute is looming between public sector workers unions and the government as negotiations have deadlocked at the bargaining council, which could threaten efficient service delivery. This after the unions yesterday seemingly refused to move from their demands and the government from its offer, respectively, as wage negotiations resumed for the fourth round.

Public sector workers unions are demanding 7 percent salary increases, among other demands, while the government remains steadfast in its zero percent salary offer. Analysts have warned that raising workers salaries above inflation amid deteriorating fiscus could see South Africa’s sovereign credit ratings status degraded further into junk.

The public sector wage bill is among three of the fastest-growing government expenditures.

The Public Servants Association (PSA), which represents more than 235 000 public sector employees, yesterday said the situation was now at a “do-or-die” point due to the government’s recalcitrance on their demands.

PSA spokesperson Reuben Maleka said the options they are left with were to launch a dispute, go for conciliation and give 48 hours notice for an indefinite strike. Maleka, however, said the unions would have to shut down the public service if the wage dispute reaches that point.

“We are at the stage where today you can regard it as a do-or-die day. As we speak right now we still don’t have any tangible offer from the employer,” Maleka said. “We fear that should the employer still stick to its offer of zero percent, we unfortunately as labour united are going to launch a dispute and go through a process of conciliation, which is going to lead to an indefinite strike action in the public sector.”

Maleka said they were hoping to have obained a new offer from the government by the end of business yesterday. Two weeks ago, Minister of Public Service and Administration Senzo Mchunu appealed to the public to submit proposals on how to break the current deadlock.

In February, Finance Minister Tito Mboweni took a hard line against the ballooning public sector wage bill which is expected to rise by 1.2 percent every year for the next three years. Mboweni announced that the government would freeze salary increases for its 1.2 million workers over the medium term to save R264.9 billion in expenditure.

In the 2019/20 financial year, the government spent 34 percent of the gross domestic product, equalling R623.8bn, to pay public servants.

But the government’s expenditure on wages is still expected to be R650.4bn this financial year.

Terebinth Capital chief investment officer Erik Nel said the government’s expenditure growth was “on an unsustainable path”.

Nel said the government needed to show it could stop expenditure from rising exponentially. “What we do not want to see is a situation where gains are wasted by paying inflated public sector wages rather than invest in the productive side of the economy,” Nel said.