The Johannesburg division of the Labour Appeal Court has dismissed a joint application by public-sector unions in which they were seeking a judgment to compel the department of public service and administration and National Treasury to increase wages and honour clause 3.3 of resolution 1 of the 2018 Public Sector Bargaining Council agreement.
That clause of the agreement, which was meant to take effect on July 1, stated that the public-sector wage bill was due to increase by up to 7%, or – under the consumer price index – plus 1%, depending on job grade.
In its ruling, the court cited that enforcement of clause 3.3 would be unlawful, as it contravened sections 213 and 215 of the Constitution, and regulations 78 and 79 of the Public Service Regulations Act of 2016, in that the wage offer exceeded the envelope that National Treasury had set aside and the offer had not been approved by National Treasury.
“When the two regulations [sections 213 and 215 of the Constitution and regulations 78 and 79 of the Public Service Regulations Act] are read together, it is clear that they impose a requirement for the conclusion of a collective agreement by the state to this extent: the cost of the collective agreement must be covered from the budget of the relevant department of state or on the basis of a written commitment from Treasury to provide additional funds or, alternatively, from the budgets of other departments or agencies, with their written consent, together with approval from National Treasury.
“From the papers, it appears that the cost of the collective agreement could not be covered solely from the budget of the seventh respondent [the department of public service and administration]. No written commitment was provided by National Treasury to provide additional funding and, further, no written agreement by any other department or agency or National Treasury’s approval has been procured to fund the deficit from other budgets.
“The applicants and the respondent unions contended that National Treasury and the minister of finance were bound by the approval by Cabinet of a draft agreement which had been entered into on January 26 2018,” read the judgments.
While the applicants contended that the department of public service and administration had engaged in the bargaining council negotiations on behalf of government and this offer had been approved by Cabinet, the judgment indicated that the offer given had far exceeded the envelope put aside by Treasury for the department of public service and administration, and the fact that the department at the time – under then minister Faith Muthambi, who first made the offer – did not obtain written approval from Treasury rendered the offer null and void in that it did not comply with regulations 78 and 79.
These regulations state that “National Treasury must enforce compliance with the measures established in terms of sub-section (1) and may stop the transfer of funds to an organ of state if that organ of state commits a serious or persistent material breach of the measures prescribed”.
A distraught Reuben Maleka, acting general manager of the Public Servants’ Association, said: “Workers are left with two options at this point: either to embark on a nationwide strike or approach the Constitutional Court as a matter of urgency.”
Appalled by government’s delaying tactics and refusal to implement its offer, the association approached the labour court in July, and was joined by other public-sector wage unions that are a part of ANC alliance partner Cosatu.
The department of public service and administration and National Treasury challenged the court application, saying the enforcement of the application would plunge the fiscus into R37.8 billion in debt, while Finance Minister Tito Mboweni opposed the enforcement of the clause in its entirety and launched a counter-application seeking declaratory relief that the relevant clause was unlawful, invalid and unenforceable.