Cash-strapped SARS can't pay unions what they want

The South African Revenue Service (SARS) has applied to the Commission for Conciliation, Mediation and Arbitration (CCMA) to intervene in a labour dispute with unions as wage negotiations have deadlocked.

This follows an 11th hour bid on Tuesday night to avert strike action which could see thousands of employees down tools on Thursday.

According to a statement issued by SARS on Wednesday ahead of a media briefing by unions later today, three wage offers that the tax revenue service put forward has been rejected.

Negotiations had first started in November 2018, at the time SARS offered unions a 7% increase, which SARS believed to be "fair and reasonable" as it is above that offered by other public institutions and most industries.

Unions rejected this offer and subsequently applied to the CCMA for intervention in February 2019. 

A certificate of non-resolution was issued by the CCMA on March 19, 2018 and unions served SARS an official notice of a strike for Thursday March 28, 2019.

The CCMA mediator had also proposed a different offer for parties to consider, which was discussed at a meeting on Tuesday with unions National Education, Health and Allied Workers Union and the Public Servants Association. The meeting continued late into the night, SARS said.

The CCMA proposed an 8% increase, among other things. It would come into effect on April 1, and result in CPI plus 1% increases in year 2 and year 3 of the agreement, SARS explained.

The disagreement came about with the term of the agreement, according to SARS, labour was not inclined to a multi-term and rejected this offer.

"Since this was a settlement offer, the rejection by organised labour of a multi term agreement left SARS with no option but to revert to its previous position of 7% across the board increase at single term."

SARS has now launched its own application to the CCMA for intervention.

Unions also rejected a previous proposal from SARS which was discussed on Monday. 

SARS had proposed a differentiated salary increase model for employees who are members of trade unions. The model will allow top performing SARS employees who are paid at the lower-end, to receive increases up to 9.2%. "In this model, no employee would receive an increase of less than 5.2%," the statement read.

Unions are seeking an 11.4% increase across the board, SARS said.

But the revenue service said it can only negotiate within its financial affordability. This depends on economic growth, and the resulting revenue collection and a reduced financial grant from Treasury, SARS said.

"SARS has explained to organised labour that it has a bigger responsibility than only considering the current salary increases.

"It needs to also consider the organisation’s financial well-being for the next three years, especially considering the weak economic conditions and SARS’ current and projected budgetary deficits," the statement read.

In the meantime, SARS has assured that steps are put in place to ensure service delivery on Thursda. However, SARS has warned some delays can be expected.

Nehawu will hold a briefing at 12:00 on Wednesday.

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