Public service unions warn of shutdown if no wage deal

Johannesburg - Public sector unions affiliated to the Congress of South African Union Trade Unions (Cosatu) have blamed government for “endless delaying tactics” in resolving wage negotiations and have warned of a possible civil service shutdown if no agreement is reached on Thursday.

The three-year deal came to an end on March 31 and labour and state representatives met in Midrand on Wednesday in an attempt to resolve the impasse.

Unions are demanding wage increases of Consumer Price Index (CPI) + 3% for junior government employees and CPI + 2% for mid-level employees.  They also want a one year wage agreement. The Bureau of Economic Research (BER) predicts CPI will be 5.2% in 2018.

Government’s opening offer was CPI increases for junior and mid-level government employees on levels 1-10 and a hike of CPI-1 for senior government employees level 11-12 and a three year agreement. 

In a scathing statement on Tuesday, seven Cosatu unions, representing more than 50% of the civil service, said that government employees are likely to miss their first increase in April, as the final day to load adjustments to salaries on the state payment system, Persal, is Wednesday.

“Workers are already edgy and anxious, and justifiably so, about the pointlessness and prolonged fate of these negotiations which have not been moving an inch forward”, the Cosatu unions wrote.

The labour organisations blamed Minister of Public Service and Administration Ayanda Dlodlo for the delays to the negotiations which began in October under former Minister Faith Muthambi, saying they do not “reflect positively on [her] leadership”.

READ: Unions to clash with govt over public sector wage hikes

Resolving the wage negotiations is critical for the government who is trying to reduce the budget deficit but can ill afford a public sector shutdown, a year before the 2019 general elections.

Hard political choices

Earlier in March, Moody’s Investor Services cited public sector wages as one of the hard political choices government will face if it plans to stabilise its debt to GDP ratio at 55% by 2020.

In a report titled "The Public Sector Wage Bill: Slaying the Dragon", the Institute of Race Relations (IRR) wrote that the public sector wage bill has become a “huge political and economic problem”.

“The negotiations are a litmus test for [President] Cyril Ramaphosa’s administration and the outcome will go some way towards revealing just how much influence the president is able to wield, and, simultaneously, will shed light on South Africa's long-term economic prospects” said  IRR Head of Politics and Governance Gareth van Onselen. 

Van Onselen added that the public sector wage bill has grown above private sector compensation and inflation, almost every year since 1994.

“The result is a wage bill that, according to the minister of finance, is now so big it is threating to breach the compensation threshold of many departments and eat into their ability to deliver services".

Unions, however, have argued that corruption in the public sector and state owned enterprises (SOE’s) led to weak economic growth and the rise in the cost of living due to the increase in Value Added Tax (VAT) to 15% and nurses, police officers and teachers should not have to bear the brunt of this.

Spokesperson for the Department of Public Service and Administration Mava Scott denied government is delaying the wage negotiations process.

READ: State drags its feet on wage offer decision

“[The] DPSA is committed to the process and any suggestion that there is a deliberate delay is not based on fact”, he wrote in an SMS to Fin24.

Dlodlo will hold a breakfast briefing with the media on Thursday to discuss the progress made in the negotiations and government’s wage offer.

Cosatu’s largest affiliate and the biggest public sector union in the country, the National Education, Health and Allied Workers Union will picket outside the Midrand Conference Centre on Thursday, where negotiations are taking place.

The union warned Dlodlo “not to start the current negotiations afresh” and to continue where Muthambi left off. Nehawu will brief its members on Friday, about the outcome of the two days of negotiations.

“While being patient of these process, the union will be preparing its members for a real fight if the outcome of the negotiations are not favourable to them and we will subsequently prepare all South Africans for any eventuality in case we have to go on a strike action”, spokesperson Khaya Xaba said in a statement.

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