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Unions to consider latest offer in public sector wage negotiations

Unions feel threatened and are not going to budge; temperatures are quite high: Chris Jacobs – director at OIM International.

DUDU RAMELA: Let’s take a look at the latest on the current public service wage negotiations. Public Service and Administration Minister Senzo Mchunu is hoping unions will accept government’s 1.5% wage (increase) offer. Public servants will also be offered a gratuity of up to R1 695. Cosato-affiliated public sector unions have so far rejected government’s wage offer, and want a R1 500 monthly gratuity and a 2% salary adjustment.

We speak now to Chris Jacobs. He’s the director of OIM International. Chris, thank you very much for your time this evening. You act as an intermediary between companies and unions. What do you perceive it will take, in this scenario at least, for government and labour to find each other?

CHRIS JACOBS: Hi, Dudu, and thank you very much for the opportunity. Yes, we must remember that this situation has come since the beginning of 2020, so it’s been dragging on and there’ve been all sorts of things happening in the meantime with demands – also from government’s side as to what it wants to put on the table.

It seems in this latest one at least what government has put on the table brings it closer to probably the overall demand from the various unions – closer, but not close.

So, looking at what it would take for government to budge on the 1.5%, because a gratuity is not a payment which includes any pension-carrying amount, will all depend on whether the members decide whether they would be happy with a cash gratuity versus the percentage increase that is currently on the table. But it would seem that government at this stage is very steadfast in saying: “We will not be giving anything more than a 1.5% increase. We would rather go the way of the gratuity.”

DUDU RAMELA: And that’s just it – the minister saying that his department is working with its back against the wall. What would you say to the school of thought that says, “Well, these are tough times. Let’s just take what we can get,” or “People should just take what they can get”.

CHRIS JACOBS: Yeah, it’s going to be very interesting, Dudu, in terms of how members will react to this, because the next step now is that these unions have to take it back to their members and one would probably need to see what the appetite is for people to go on strike. Some of the unions have threatened a so-called ‘mother of all strikes’. Personally, I don’t believe the time is right for something to give members to go on the so-called ‘mother of all strikes’ on the one hand, but on the other side the community and the economy at large can definitely not afford a major strike in that regard. It would be fatal to our economy if something like that happened.

So in the end members will decide. But my personal feeling is that members probably would decide to rather opt for the gratuity.

DUDU RAMELA: As you mentioned, the waltz has been rather messy, with people stepping on each other’s toes. I’m curious to find out, Chris, from the work that you do, what you would say the temperature of negotiations is between government and labour, if you were to take a wild guess?

CHRIS JACOBS: I believe, again, if one looks at this from a union perspective, they are very much up in arms about Treasury’s whole idea to bring down the government labour bill at least R300 billion over the next three years. Government has already made that very strong statement. And it’s probably also why Mr Mchunu has issued a very firm declaration in this regard.

What we are seeing is that unions are feeling under threat that what they are seeing, at least over the next three years, a reduction – well, not a reduction in wages and salary, but a sort of freeze on wages and salary increases, which doesn’t bode well for them. On the other hand, we sit with government which has this intent and very little room to manoeuvre in terms of this, because that’s the intent from the side of Treasury, as well our all being carefully watched in terms of what government’s responsibility is in terms of keeping control of this.

If one looks at this in perspective, then 35% of government expenditure on the public sector is with regard to our public-sector labour bill. That’s the single greatest or biggest criticism with regard to government expenditure – specifically in the public sector. Government is forced to take that strong stand, and the temperature in that regard is “We’re not going to budge’’.

On the other hand unions feel threatened and say, “We are also not going to budge because of what we are seeing here” – and the interpretation is that they are being exploited. Temperatures are quite high.

DUDU RAMELA: I can’t imagine that the situation is unique to South Africa. Where can we learn from looking at the rest of the continent – or outside the continent, for that matter?

CHRIS JACOBS: I think if we look at the top of the economy, typically in international situations in developing economies, you often get upset with a situation where unions are as strong and have such a major influence in government as part of a tripartite alliance. So that makes it very difficult to draw any analogy within a comparable situation.

You sit with that situation on the one hand, but you also sit with a situation where, from the perspective of the union that they control around 1.3 million workers in the public sector, and they can sway things, and have a lot of economic power in this regard.

If we look to the north of our borders, what we typically would see is that government would clearly say, “This is what we are prepared to offer”, and there would be a bit of argy-bargy about it, but they would settle around this. In our case what we are seeing, however, is protected negotiations going on and on and on. And with the shenanigans going on, we already sit with a situation where the PSA (Public Servants Association) already has a strike certificate to go on the strike for around the 250 000 people they represent.

We are much stronger on tactics in this regard, but we also sit with an alliance partner which has some influence within government structures around this. But it’s very difficult to compare with any other situation in the world.

DUDU RAMELA: Thank you very much for your time this evening. Chris Jacobs is the director at OIM International.

COMMENTS   9

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Unions, the tail that wags the dog!

The wage bill, the Elephant in the room!

ANC, weak and useless to the core!

Tax payers, tired of subsidising a failed State!

These unions should just be shut down : they are one of the biggest deterrents to RSA economy ever growing : mostly useless “workers” protected by unions bribery .Biggest skill appears to be striking !

By the end of the third wave it looks like perhaps 1 in every 30 people over the age of 60 will have died from COVID based on excess mortality statistics. As a result, the defined benefit Govt Employees Pension Fund solvency must have been dramatically enhanced. Why not offer a 10%-20% reduction in pension contributions for the next 3 years or similar – then wage increases can be funded out of employee’s own pension pots.
Furthermore, it was reported in the past week that national savings had increased from 14% to 18% of GDP in the last year. Since the state is the largest employer in SA and it has seen no salary cuts or staff reductions (unlike the private sector) one assumes saving by state employees must have been a big contributor to that. So their net savings have likely increased.
One could even consider a larger optional reduction in pension contributions in return for a reduced final pension benefit for those who want more money in their pocket. Given, the average South African only lives to age 63 some would almost certainly go for that.

Can the public see salary data of the people whose salaries they pay please?

So many under R10,000 per month
So many to R20k
So many to R30k
So many to R40k
So many to R50k
So many to R60k
So many to R70k
So many to R80k
So many to R90k
So many to R100k
So many…

One just has to a apply for a driving license renewal, or visit Home Affairs, to understand how laughable the assertion is that a strike will be devastating to the economy. The productivity levels of the public alleged service are approaching zero. Far from an increase, what the economy needs is a 30% reduction in salary for public alleged servants, that is after a 50% reduction in public alleged servant numbers.

Crypto aside 🙂 … I agree with you on this.

I phoned Ekhurhuleni help line… they tell me the direct numbers are not working because people are working from home.

Not sure what work they doing at home.

So much for public wage bill restraint. The rating agencies warned that this would happen as the Corrupt ANC government is weak and infested with rent seekers, fraudsters, gangsters, etc., who have no interest in “fiscal discipline”.
The country burns whilst the Corrupt ANC dithers. Just look to Nkhandla to see what happens in this banana republic.

I am just worried where the money will come from, since it hasn’t been budgeted for.

They don’t budget for theft and corruption, yet the money seems to fall from the sky

All they do is they introduce a

Sugar tax, sins tax, omissions tax, increase vat, shopping bag tax, road levy tax,

Look out for flatulence tax ….Wouldn’t put it past the thieves..So take heed farmers, your cows are under threat of being taxed for pooping

End of comments.

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