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SA reaches interim pay deal with public-servant unions

Averting the threat of an imminent strike.
Image: REUTERS/Mike Hutchings

South Africa’s government said it reached an interim pay deal with unions representing a majority of civil servants, averting the threat of an imminent strike.

The agreement was signed Monday by the South African Democratic Teachers’ Union, the National Professional Teachers’ Organisation of South Africa, the Health & Other Services Personnel Trade Union of South Africa, the Public Servants Association of South Africa and the Democratic Nursing Organisation of South Africa, the Ministry of Public Service and Administration said in an e-mailed statement on Tuesday. It didn’t specify the terms and duration of the deal.

“There are going to be further engagements between the parties” and the interim accord will apply until a new one is finalised, Kamogelo Mogotsi, a spokeswoman for Public Service and Administration Minister Senzo Mchunu, said by phone. “It is open-ended.”

The government needs to curb its wage bill to meet its expenditure ceiling and deficit-reduction targets, but has encountered opposition from politically influential labour groups representing many of the 1.3 million state workers.

Finance Minister Tito Mboweni has vowed that any raises must be accommodated within the current fiscal framework, and other expenditure will have to be cut should the budgetary allocations for wages be exceeded. Fitch Ratings and Moody’s Investors Service have both expressed doubts as to whether the government will be able hold its ground over the next three fiscal years.

The interim accord, which provides for 1.5% raises and monthly cash gratuities for all civil servants until the pay talks are finalised, is a “stop-gap measure” because negotiations failed to deliver a binding agreement, said Claude Naiker, a spokesperson for the Public Servants Association, which represents more than 230 000 state workers. The increases and gratuity will be backdated until April 1, he said.

The raises were provided for in the February budget but it’s unclear how the monthly payouts of R1 000 ($67) after deductions — which will be given to all state workers regardless of how much they earn — will be funded.

The National Education, Health and Allied Workers’ Union, which represents the biggest component of state workers, rejected the interim accord but will still be bound by it because it has majority backing.

© 2021 Bloomberg

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Here comes another downgrade. What happened to the budget Tito ?

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