Mining wage

Public sector unions slash wage demands to end tax…

Salary negotiations between the government and the unions representing civil servants have been exceptionally cordial, perhaps a sign of improved labor relations in the public sector.

The government has remained firm in rejecting the request for a 10% salary increase for 2022 submitted by the unions representing 1.3 million civil servants. He counter-offered a 4.5% raise.

Given historical trends, unions would normally froth at the mouth and immediately issue a strike threat that would shut down public schools, hospitals and police stations.

But this time the unions made no such threat, opting instead to find common ground with the government through further negotiations.

They even reduced their wage demands to accommodate the government’s difficult financial situation. The latest development is that the unions are ready to revise their demand from 10% to 6.5% even below consumer inflation, which stood at 7.4% in June.

Public sector unions made the concession after pay negotiations stalled when the government initially rejected double-digit pay rises for doctors, nurses, teachers, police officers and others.

Agreement ‘the bottom line’

Ruben Malekathe chief executive of the Public Servants Association, which represents more than 230,000 public servants, said business maverick that the drop in demand to 6.5% was made in the hope of reaching an agreement with the government.

“This is our last goal to reach an agreement,” said Maleka.

The next round of negotiations is scheduled to begin on August 3 at the Public Service Coordinating Bargaining Council (PSCBC), where the two parties negotiate terms and conditions of employment in the public sector. At the meeting, the government is expected to give its response to the unions’ new figure.

The unusual calm in recent public sector wage negotiations has been the antithesis of what has happened in other spheres of the labor market and the economy.

Eskom workers won a 7% pay rise after cutting down tools, backed by the National Union of Metalworkers of South Africa and the National Union of Miners – whose actions have plunged the country into darkness by intensifying power outages.

Workers at the South African Revenue Service (Sars) have been on strike for two months because the tax collection agency rejected wage demands of between 10% and 12% filed by unions, including the Public Servants Association. The timing of the strike in Sars is unfortunate as the 2022 tax collection season is in full swing.

Sibanye-Stillwater is still recovering from a three-month strike at its gold mining division that halted operations and slowed gold production levels.

Public finances

The government appears to have rejected the public sector unions’ initial demand for a 10% raise because public finances are under increasing pressure, ranging from taking on a large part of Eskom’s debt (to minus 200 billion rand) looking for ways to fund a base income allowance.

“We are becoming sensitive to government financial challenges. That is why we are ready to reduce our demands and make them affordable,” another union boss said. business maverick.

Instead of agreeing to a 10% pay rise, the government has proposed continuing to give civil servants an after-tax cash gratuity (or bonus) of R1,000 per month in 2022, which would cost the tax authorities 20.5 billion rand. .

The National Treasury has budgeted for the cash gratuity in its 2022/23 spending framework and has always been ready to extend it for another year if it disagrees with the unions on their pay demands.

In addition to the cash bonus, civil servants would receive a 1.5% salary increase known as “salary progression”, which is usually given to civil servants for their years of service or performance and written in pencil each year. . The cash gratuity and 1.5% “wage progression” would result in a 4.5% pay rise for civil servants, the government told the PSCBC.

But the unions entered the negotiations in a weak position, believing that The Constitutional Court has ruled the government can renege on a 2020 deal that gave civil servants an 8% pay rise because it can no longer afford to stick to it.

“The government’s reneging on the 2020 pay deal has led to mistrust between unions and government. And this environment tends to weaken the power of the union in negotiations.

“A precedent has been set by the court that allows the government to walk away from deals it cannot afford,” labor attorney Michael Bagraim said. DM/BM