Unions press government to stick to the wage agreement

Public service unions ask the courts to enforce government compliance with wage agreement

Public sector unions including the Public Servants Association (PSA), the SA Democratic Teachers’ Union, the National Professional Teachers’ Organisation of South Africa, and the Health and Other Services Personnel Trade Union of South Africa, want the courts to compel the government to stick to the final year of the three-year wage agreement.

The agreement was signed by the government and trade unions in 2018 at the Public Service Co-ordinating Bargaining Council. It was followed for two years, but the state has said it is unable to implement the final year of the agreement due to the strained fiscus brought on by rising debt and the Covid-19 pandemic.

In court papers, the PSA argues that the government cannot fully blame the state’s weakened finances on the pandemic. The PSA says other issues such as the economy’s failure to grow and dwindling revenue collections over the last few years should also be considered as part of the precariousness of public finances.

This assertion is maintained by Treasury’s answering affidavit, which acknowledges that, even before the Covid-19 crisis, tax revenues had not grown quickly enough to accommodate the pace of remuneration growth and it had become increasingly unaffordable. In addition, along with rising debt and debt service costs, this had become a key driver in the deterioration of the country’s public finances.

The unions further argue that even if the court finds the agreement to be invalid, the court is obliged to determine “a just and equitable remedy” which would compel the government to meet its obligations in a “staggered or phased-in manner”.

The government requested that its next court appearance be on 1 February 2021 to allow them to iron out the details of the possible settlement.

The implementation of the full wage deal would have cost the government an additional R30.2 billion (R6.2 billion for 2018/2019; R10.7 billion for 2019/2020; R13.2 billion for 2020/2021).

October’s Medium-Term Budget Policy Statement showed that the wage cuts would result in a decrease in the budget deficit from 14.6 percent of gross domestic product (GDP) in 2020/2021, to 7.3 percent by 2023/2024. If this is done, it is projected that it will stabilise the gross national debt at 95.3 percent of GDP by 2025/2026.

These reductions on spending could save the fiscus R300 billion.

Unions affiliated with Cosatu plan to stage a sit-in at the Union Buildings on 4 December to demand President Cyril Ramaphosa’s response to a memorandum submitted during the national day of action on 7 October.

Unions have called on the government to respect International Labour Organisation conventions regarding collective bargaining.