Unions slam new govt wage move as 'abominable'

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Cape Town - Public sector unions on Tuesday threatened to abandon a recent wage hike deal after the government said it would raise salaries by 6.4% for the first of a three-year deal and not 7% agreed last month.

Should government press ahead with its new wage offer, it could open up the possibility of a protracted public sector strike, which is struggling with sluggish growth rates forecast at 2% this year.

The government said in a letter it had used an agreement three years ago to justify its claw back, arguing it was owed an "over-adjustment" of 0.6% by the unions.

The state said this was the difference between the actual average consumer price index (CPI) of 5.6% for 2014/15 and the projected CPI of 6.2%.

"Failure to implement the 7% as agreed will leave labour with no option but to withdraw from the entire agreement," the unions said in a joint statement.

"We find this latest approach abominable and confrontational to say the least, because the employer has no business attempting to link a lapsed agreement with a new one," the unions representing 1.3 million teachers, nurses and police officers said.

A government official said both parties had agreed to seek legal opinion on the impasse.

Following protracted mediation following a deadlock in negotiations, government agreed on May 19 to pay workers a 7% raise for the first year of the agreement, and average inflation plus 1% for the following two years.

The government also agreed to increase medical aid by 28.5% per worker and increase a housing allowance to R1 200 a month, from R900.

Any strike action by public sector workers could hurt investor sentiment and business confidence in South Africa, which has been hurt by a wave of industrial action in its key mining and manufacturing sectors over the past two years.

The public sector wage bill has risen more than 80% over the last decade as yearly increases have averaged more than 6% above inflation and the government is under pressure to rein in spending and curb costs as rating agencies flag possible downgrades.

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