Business Maverick

TOUGH TALKS

Unions demand 10% increase in public sector wages, setting the stage for a bitter battle

The national engineering workers’ strike on 5 October 2021 in Johannesburg, South Africa. (Photo: Gallo Images / Sharon Seretlo)

Business Maverick has seen a document that summarises the consolidated demands of trade unions, which include a 10% wage increase applying to all public servants – regardless of their employment level or number of years in service. This increase would cover the government’s 2022/23 fiscal year.

The stage has been set for a bitter clash between the government and public sector unions, with the latter proposing a one-year agreement that affords SA’s public servants wage increases of 10% for 2022.  

Trade unions representing public servants formally tabled their wage demands and other remuneration benefits on Wednesday at the Public Service Coordinating Bargaining Council (PSCBC). The PSCBC is where trade unions and the government negotiate the conditions of employment in the public sector. 

Business Maverick has seen a document that summarises the consolidated demands of trade unions, which includes a 10% wage increase applying to all public servants – regardless of their employment level or number of years in service. This increase would cover the government’s 2022/23 fiscal year. 

Other demands include a R2,500 increase in the housing allowance afforded to public servants, the introduction of a bursary scheme for their children, relief funds for disaster periods such as Covid-related lockdowns, and measures that allow public servants to easily access pension savings if they fall on hard times.  

Tough negotiations ahead 

But the Department of Public Service and Administration (responsible for public sector employment conditions) and National Treasury will arguably be taken aback by the 10% wage increase demand for several reasons.  

First, the proposed wage increase is well above consumer inflation, which measured at 5.9% in March, according to Statistics South Africa. The 10% wage increase demand is even high by historical standards.  

Over the past decade, the consumer inflation rate has always been built into the structure of wage adjustments – known as a “cost of living” increase. Up to two percentage points would be added on top of the inflation rate to reach the final wage adjustment rate. The two percentage points would be for pay progression, which is awarded to public servants for their years of service or performance.  

Second, Treasury has already committed to not award public servants inflation-beating wage increases because it wants to wrestle down the wage bill to more affordable levels. In 2022 alone, the government will spend R682.5-billion to remunerate SA’s 1.2 million public servants, including nurses, doctors, teachers and police officers – the largest component of government spending. 

But trade unions believe that public servants – many of whom are on the front line against the Covid-19 pandemic – have made “enormous sacrifices” for the government over the past two years. 

“Public servants also deserve wage increases,” a union boss told Business Maverick, adding that over the past two years public servants had not been awarded inflation-linked wage adjustments because Treasury had embarked on a wage freeze to rein in ballooning government expenditure and debt.  

All that public servants received in 2020 and 2021 was a 1.5% “pay progression”, which had always been pencilled in by Treasury. 

On top of this adjustment, Treasury offered public servants an after-tax cash gratuity (or bonus) of R1,000 a month in 2021 to sweeten its offer. Treasury is prepared to extend the gratuity for another year.  

At the PSCBC, the trade unions have also proposed big changes in how their remuneration is negotiated. The unions are now negotiating wage adjustments for a single year (2022). This is a departure from past practices, as trade unions and the government preferred to conclude a multi-year wage agreement, covering at least three years. Multiyear wage agreements allow the government to plan for finding money to fund wage increases for public servants.  

The unions also want a “written commitment” from the Treasury, mandating the Department of Public Service and Administration to enter into wage negotiations. This would have the effect of binding Treasury and the department on whatever is agreed to with unions. 

The bargaining position of the unions in wage negotiations was weakened after they lost their case at the Constitutional Court in February that sought to force the government to implement wage increases of about 8% in 2020, under the last leg of a three-year wage agreement. 

The top court tossed out the union’s case because representatives of the department had signed the last leg of the three-year wage agreement without Treasury’s concurrence and also without knowing if money would even be available to fund these increases. DM/BM

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All Comments 7

  • Typical. “Public Servants”. Who do they serve? Themselves through corruption and feasting. The only public servants I would give increases to are the nurses and doctors. They deserve and earned that right.

    • The only thing the union leaders focus on is their monthly subscriptions. Whatever the repercussions are for the economy is irrelevant.

  • Obviously union leaders are feeling the pinch, and the spotlight us on tenders etc. so they need some way to give themselves a bonus, regardless of the damage it does to the economy and the threat to job continuity of an increased wage bill!

  • I find it odd that the rank and file members would be asking for top managers to be getting the same increase as they want for themselves, do they really believe that the top tier millionaire managers in the civil service deserve 10% on top of their already bloated salaries?

    I would normally have a knee jerk reaction to union demands but in light of the sheer magnitude of monies that the Government has managed to disappear into black holes over the last 20+ years it is no wonder that civil society would be demanding that a little bit of the gravy spills in their direction and damn the consequences.

  • Agree that public servants get a 10% wage increase.

    But they must chose between:

    10% of public servants must be retrenched.
    Or
    All public sector workers must work on Saturdays as well.

    Monetary gains must be exchanged for productivity gains.

    While nurses have had a tough time the rest of the public sector workforce have done very little at great expense to the discus. Plus all those running outside businesses some doing business with the state too.

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