ANALYSIS: The costly compromise of the public sector wage deal
A deal has been reached in the middle of a breaking economy. But what does it mean for employees?
While the wage negotiations in the public sector have ended following the conclusion of a wage deal at the Public Service Coordinating Bargaining Council, trade unions have described it as an interim measure, as those who rejected it says it’s a regression for workers.
The wage agreement has been months in the works after the government opened the negotiation table with a 0% wage increase offer while workers proposed 7% among other conditions of service including medical aid and housing allowance hikes.
However, some months later, both parties have compromised, and while the deal blows open the compensation ceiling in the public sector, workers too have made sacrifices.
The cash allowances, which are R1,220 for workers on salary level 1 and R1,695 for salary level 12 with others varying in-between, are non-pensionable.
While parties agreed to use a sliding scale that favours low paid workers in the public service, the cash payments don’t guarantee them better financial security as it doesn’t change the baseline of their pay.
What it does do, however, is provide them with extra cash in the pocket, with the payments set up in such a manner that no one will receive below R1,000 after tax in monthly payments, which will be backdated to 1 April.
Unionists argued that given the current economic climate in the country, this is “good news”.
South African Democratic Teachers’ Union general secretary Mugwena Maluleke says that, given that the government opened talks at 0%, the deal would bring a “relief” to workers. But he added that the deal did not come cheap.
“It has exhausted us. I mean we had to move from a zero offer, to where we are at about R27 billion. From the union perspective, it has drained us because we were dealing with an austerity-based budget, and therefore, it took a lot of engagement and a lot of pressure [on] the Department of Finance to the extent that it started realising the importance of collective bargaining,” said Maluleke.
The 1.5% pay progression is also not a victory for workers in the true sense as it was concluded before this year’s negotiations and the government was contractually bound to deliver on it, nonetheless.
But it too has an upside for workers. Unions managed to convince the government to extend the pay progression to all workers across salary scales and departments.
Ordinarily, the pay progression would be afforded those workers who had already entered the performance-based
Biennial performance-based pay progressions of 3% which were agreed upon already, for nurses and police officials among other professions in sectoral agreements will be paid in half in 2021 and 2022.
Pay progression means progression to a higher notch within the same salary level/scale.
However, despite enjoying majority support, the deal has failed to garner the favour of all trade unions in the sector.
While it is not the first time that others have left their signatures out of the agreement, with the Public Servants Association not signing the 2018 wage agreement most recently, it is not ideal.
The National Education Health and Allied Workers Union (Nehawu), the Police and Prisons Civil Rights Union and the South African Police Union have not signed the agreement.
The unions have disputed the nature of the agreement, raising several issues with it which ultimately speak to the evolution of collective bargaining in the sector.
Ordinarily, the sector signs three-year agreements, allowing room for labour peace in the sector for some time.
This year, the parties signed a one-year agreement on the insistence of the Treasury.
Nehawu vice-president Mike Shingange told Eyewitness News that the agreement sets the workers back.
“It does not increase the pension of workers, the employer is telling lies in the public saying there is a 1.5% increase when this has long been negotiated for, this in our view is the culmination of an attack on collective bargaining,” he said.
Shingange emphasised that they always stood by this point after unions were defeated last year when the government decided to rescind a 2018 agreement to increase workers’ salaries in 2020 and went on to win the challenge in court.
The unions have appealed, and the case will be heard in the Constitutional Court next month. However, Nehawu’s options are limited.
After having declared a dispute after the final offer was tabled at the beginning of this month, the unions and others who did not sign the deal will have a conciliation meeting on Friday.
Should a certificate of non-resolution be issued, the unions will have the option to pursue a strike, but they have not expressed such desire.
Earlier, the Public Servants Association’s Reuben Maleka said the conditions in the country were undesirable for a strike, which was one of the reasons which led to their members choosing to sign the agreement.
And he is correct.
The COVID-19 pandemic places serious restrictions on the movement of people, let alone risks accompanying large gatherings of protesting people after the chaotic scenes witnessed in the country recently.
Shingange said it is the “principle” of the new agreement they were vehemently opposed to.
Nehawu, Popcru and Sapu members will receive the salary adjustment and cash allowances once the government implements the deal, despite not being signatories.
Minister Senzo Mchunu said very little about the agreement in the statement issued on Tuesday, only welcoming it, as he acknowledged it had been difficult to reach.
However, the undertone of his message and the statements made by unions which sign indicate that the deal was a “compromise” by all measures.
It is a “stop-gap”, said the PSA’s Reuben Maleka when describing the deal, as he expressed faith that the government and organised labour would return to the negotiations table soon to conclude other outstanding conditions of service issues.
The agreement though, albeit an interim measure during an extraordinary time, has given the government the indicators needed to go forward with major shifts earmarked for the sector to cut the wage bill.
However, even costlier, is the cost of the deal that Treasury has already confirmed will cost much more than budgeted for in a difficult fiscal environment.