Government digs in its heels on not paying public sector wage increases

Public sector workers, some of whom are on the frontline in SA’s battle against the Covid-19 crisis, are probably in for a rude awakening on Wednesday 15 April about their annual salary increases.

A big portion of 1.2 million public sector workers – such as those providing essential services during the five-week lockdown, including doctors, nurses, and police officers – will not receive inflation-beating salary increases on Wednesday that were promised by the government.

The government, which wants to renege on a three-year wage agreement entered into with workers in 2018, hasn’t told public sector workers and trade unions about its intention on annual salary adjustments even though the first batch of workers will be paid on 15 April.

The government had a deadline of 1 April to either renege on the wage agreement or fulfil the promise it made to pay public sector workers salary increases. But the government dithered, only saying that it wanted to review the wage agreement.

Business Maverick was informed by a government official that public sector payroll systems haven’t even been updated to factor in salary increases.

The Public Servants Association (PSA) assistant GM, Reuben Maleka, said some workers received their pay-slips on Tuesday 14 April that didn’t indicate salary adjustments. The PSA is the second-largest public sector trade union in the country representing essential services workers in government agencies such as home affairs, SA Revenue Service and SA Social Security Agency.

Arguably, the optics of the government not honouring payments to public sector workers at a time when they are risking their lives to contain the spread of Covid-19 are bad.  

As Martin Kingston, who is assisting the government draft economic interventions to contain the fall-out of Covid-19 through a new organisation called Business for SA, puts it: 

“We fully support for the government to honour its wage agreement and provide support to workers helping to fight Covid-19. But we also have to recognise the fiscal constraints.”

Legal action

PSA and its affiliate, the Federation of Unions of South Africa, plan to approach the Labour Court on Wednesday 15 April to challenge the government’s decision to not comply with the three-year wage agreement. 

“The wage agreement is still legally binding on the government [the employer]. We have to approach the Labour Court for a specific resolution of treating the wage agreement as a contractual obligation that the employer has to honour,” said Maleka.

The wage agreement spans three years and was signed in 2018 at the Public Service Co-ordinating Bargaining Council, where the government and public sector unions negotiate terms of employment. The year 2020 is the last leg of the agreement.

Under the agreement, workers at levels one to eight – mainly general workers and support staff – would be paid increases of the projected consumer price index (CPI or inflation) plus 1%. The pay of workers in higher-income categories of levels nine to 16 – mainly assistant directors up to directors-general – would rise by projected CPI plus 0.5%.

But the government wants to renege on this agreement because it wants to cut the public sector wage bill by R160-billion over the next three years as it is the single largest component of government expenditure – at R639-billion for the 2020/2021 financial year.

To cut the wage bill, the government proposed a 4.4% increase for workers at levels one to eight while workers in higher-income categories – between levels nine and 16 – will get no increase. To fund the 4.4% increase, the government proposed using the funds that would have been used to give 1.5% performance-related increases to workers in 2021/2022.

Maleka said although the PSA will approach the Labour Court on an expedited basis, the dispute between the government and labour might be resolved as late as July due to the Covid-19 lockdown. This means that the government might continue paying public sector salaries without increases from April until the Labour Court dispute is resolved.

But PSA will push for back pay on salary increases not paid if the Labour Court rules in favour of workers down the line. 

“Whether it is going to be in June or July [when the court makes a determination], the fact of the matter is that they will have to pay back from April,” said Maleka.

Meanwhile, other public sector trade unions affiliated to Cosatu have invoked a dispute resolution process at the Public Service Co-ordinating Bargaining Council, where the wage agreement was signed, to enforce terms of the existing wage agreement.

In this process, the government and unions will enter into talks, which are mediated by a third party (a commissioner), over the wage agreement. If both parties don’t come to an agreement, the matter might be referred to a Labour Relations Act-governed arbitration process, whereby the wage agreement could be enforced.

Asked about whether public sector workers would be paid salary increases, Vukani Mbhele, the spokesperson for Public Service and Administration Minister Senzo Mchunu, initially referred Business Maverick to a two-week-old statement.

In the statement, Mchunu, who oversees public sector wage agreements, said the government is committed to implementing wage increases on 1 April. Mbhele then said Mchunu would abide by dispute processes launched by trade unions, without clarifying whether salaries will be adjusted. BM