When Finance Minister Tito Mboweni announced cuts to the public sector wage bill in his budget speech without having secured a collective agreement between government and unions he overstepped in his duties, trade union federation Cosatu said on Thursday.
On Wednesday Mboweni said the public sector wage bill would be reduced by R160 billion over the next three years, which involves reviewing increases for the final year of the three-year wage agreement unions entered into with the government in 2018.
The day before the budget, government tabled a proposal at the Public Service Co-ordinating Bargaining Council (PSCBC), the focus of which is to “discuss the containment of costs in the final phase of implementation in the current wage agreement”.
The final-year increase is supposed to come into effect on April 1, but if the state has its way, the increase will be reduced by R37.8 billion, the saving Mboweni said government aims to achieve in the next financial year.
The public sector wage bill accounts for 35% of the government’s consolidated expenditure and has been identified as the easiest way for the state to cut expenditure, as it battles with a widening budget deficit and declining tax revenues.
“Organised labour understands where we are, they have made constructive proposals on a range of issues,” Mboweni said.
Stay in your lane
On Thursday Cosatu’s leadership voiced a different perspective.
Cosatu president Zingiswa Losi said Mboweni spoke about issues that are not in his competency and the federation would not accept that.
“It was irresponsible of the minister to make mention of a process he is not part of,” Losi said, explaining that the minister of finance is not part of the Public Service Bargaining Council (PSBC) process, which falls within the ambit of the public service and administration ministry.
“You can’t bring issues of negotiations when there are processes of collective bargaining into your budget vote and even anticipate that the end result of that process will end with a cut in public servants’ wages,” said Losi.
No room to negotiate
Mike Shingange, Cosatu’s first deputy president, told media that government had taken a unilateral decision that it was trying to impose on workers and they won’t “allow it to go ahead”.
“This country has been founded on the basis of social dialogue and has established institutions of social dialogue [such as] Nedlac and bargaining councils,” said Shingange.
“The minister must pronounce a settlement that is a result of a collective agreement reached by the social partners; when you have a minister of finance pronouncing things that must be discussed and agreed upon in the bargaining council, you are undoing and undermining and actually attacking the principle of collective bargaining”.
Shingange said that government’s proposal at the PSBC was “mischievous” because it comes just 20 days before the final year of the agreement is supposed to be implemented.
“When Treasury has taken a decision and says this is what needs to be cut, what is left to negotiate? Because the government has taken a decision,” said Cosatu general secretary Bheki Ntshalintshali.