Unions not on board with public sector wage proposal at Nedlac

Labour unions are not playing ball when it comes to finance minister Tito Mboweni’s plan to slash the public wage bill by R160 billion over the next three years, even after President Ramaphosa promised on Monday that government would not cut jobs.

The president said in his weekly newsletter that the state wage bill savings would come from lower wage growth, but the country’s biggest unions and federations say they will not accept that either.

"We will go to negotiations the way we always go to negotiations. We don’t accept conditions. Anything will be an outcome of negotiation. We are not going there saying we acknowledge austerity," said the Congess of SA Trade Unions’ (Cosatu) spokesperson Sizwe Pamla.

He said labour representatives that met government and business leaders at the National Economic Development and Labour Council (Nedlac) on Monday were clear that workers will not be reopening this year’s wage discussions or negotiating lower wage increases in the next bargaining council.

Cosatu, the Federation of Unions SA (Fedusa) and others that took part in Monday’s Nedlac meeting drew battle lines immediately after Mboweni announced plans to reduce the public sector in last week’s budget speech.

Mboweni’s plan had not been tabled at the public service coordinating bargaining council before it was announced in last week's budget, as the next round of wage bargaining only begins in August. However, the Minister did inform organised labour that government wanted to withdraw from this year’s wage agreement. But labour says this will not happen.

"There’s nothing to talk about. At Nedlac, they wanted to discuss the issue, but why should we discuss it? So, when they say they are talking to labour, we don’t know who they are talking to, because labour cannot talk without a mandate from workers," Pamla.

Nedlac 'not a negotiating forum'

Fedusa’s acting general secretary Riefdah Ajam said it was disingenuous for government to attempt renegotiating a wage agreement that was concluded and signed in 2018 at Nedlac as this was not a forum for wage bargaining. She said unions made it clear to government and business that they will not change their position.

"We have to make it known to all interested parties that Nedlac is not a negotiating forum. It’s a matter that will be discussed only in the public service coordinating bargaining council, and nowhere else," she said.

Pamla said they were going to take the same message to the ANC’s national working committee meeting, which also took place on Monday. He said if the ruling party "understands" the finance minister’s plight and chooses to support him, it shouldn’t try to influence labour because "workers will never get any increase if you start to politicise collective bargaining".


Azar Jammine, director and chief economist at Econometrix, said without organised labour’s support, it’s doubtful whether minister Mboweni will be able to deliver even a fraction of the public wage bill savings of R160 billion.

"Many analysts have already expressed skepticism on whether or not that will be achieved. When the minister avoided increasing the tax rates, there was a price to pay and this was the price that was supposed to be paid. But many people already felt that the unions were not going to play ball," said Jammine.

Without public sector union’s support or restructuring of state-owned entities, SA’s budget deficit will skyrocket, and so will the public debt, to the point that even Moody’s will not be able to keep the country in investment grade, said Jammine.

He added that unions had a point, though, when pointing out that workers are being the sacrificial lamb, since no action has been taken against any of the people who have been accused of corruption.

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