Public sector trade unions force government’s hand by tabling inflation-busting wage increases for 2021

Trade unions representing public servants have tabled their wage demands for 2021, asking for an inflation-busting increase when the government wants to forge ahead with a three-year wage freeze.

Several days after Finance Minister Tito Mboweni reiterated a wage freeze for SA’s 1.2 million public servants in the Budget Review to cut government spending and bring ballooning state debt under control, trade unions have asked for an increase of consumer price inflation plus 4% in 2021.

The National Treasury and Reserve Bank expect consumer price inflation in 2021 to average 3.9% and 4% respectively, meaning that trade unions want public servants such as teachers, nurses, doctors and police officers to be awarded an increase of more than 7%.

This would be an across-the-board increase, as all public servants, regardless of their employment level, would be in line for higher remuneration. Business Maverick has seen a document that outlines the demands by trade unions including the Public Servants Association, others affiliated to Cosatu, and the Federation of Unions of SA (Fedusa).

Trade unions met on Monday 1 March at the Public Service Co-ordinating Bargaining Council, where they negotiate terms of employment with the government, the employer. The last leg of a three-year wage deal, which was entered into by the government and trade unions in 2018, comes to an end by March 2021.

Trade unions are pushing the government to agree to a new agreement that would cover their wage demands for 2021. A new wage agreement is supposed to take effect on 1 April.

But the government is not budging on awarding public servants wage increases. In 2020, it refused to award public servants a wage increase of 4.4% or 5.4% — depending on their salary scale — saying the increases were unaffordable for public finances that have been decimated by the Covid-19 pandemic. Finance Minister Tito Mboweni announced a three-year wage freeze to slash government spending by R300-billion.

Although Mboweni is steadfast on wage freezes for public servants, the expenditure on wages is still expected to be a whopping R650.4-billion in 2021/22 — a big line item of expenditure in the Budget.

More union demands

Another big demand by trade unions is to ditch the model of signing multi-year wage agreements with the government. The government prefers a multi-year agreement because it can anticipate and plan for the cost/liability of paying public servants over a three or five-year period, factoring in adjustments for inflation.

However, at the Public Service Co-ordinating Bargaining Council, trade unions have proposed a single-year wage agreement.  This is because trade unions feel betrayed by the government, which refused to implement wage increases in the last leg of the three-year wage agreement. 

Trade unions also want the lowest wage bands of public servants (levels one to three) to be abolished. Workers in this band include general workers and support staff who would ordinarily receive a bigger wage increase percentage than workers in the higher income band. Trade unions want level four of the wage band, which guarantees higher wages than levels one to three, to be the entry-level for public servants. In other words, even an entry-level public servant would earn higher wages as they would immediately move to a level four wage band.

Other demands include a payout amounting to 12% of a public servant’s salary if they are affected by Covid-19, special leave during the December holiday period, leave for public servants who are victims of gender-based violence, and the housing allowance benefit to be increased by R2,500.

See more demands here.

The trade union demands for 2021 might be premature because the dispute over wage increases could be heading to the Constitutional Court.

Trade unions affiliated with Cosatu and Fedusa have approached the Constitutional Court to appeal against a Labour Appeal Court ruling that handed the government a huge victory in December 2020. The court ruled that the government shouldn’t implement wage increases for public servants in 2020 because public finances have deteriorated due to the pandemic. DM/BM