Public sector unions have rejected a request to postpone Wednesday’s Labour Appeal court battle with the government regarding the contentious 2018 wage bill agreement. The agreement was signed by the government and trade unions in 2018 at the Public Service Co-ordinating Bargaining Council.
Unions representing the Public Servants Association (PSA), the SA Democratic Teachers’ Union, the National Professional Teachers’ Organisation of SA, and the Health and Other Services Personnel Trade Union of SA want the court to compel the government to stick to the final year of the three-year wage agreement.
The collective agreement was implemented for the first two years, but the state has expressed its inability to implement the final-year agreement due to the strained fiscus brought on by rising debt and the Covid-19 pandemic.
The implementation of the full wage deal would have cost the government an additional R30.2 billion (R6.2 billion for 2018/2019; R10.7 billion for 2019/2020; R13.2 billion for 2020/2021).
The unions further argue that even if the court finds the agreement to be invalid, the court is obliged determine to ‘a just and equitable remedy’. This would compel the government to meet its obligations in a ‘staggered or phased-in manner’
In a last-ditch effort to reach an out-of-court agreement with unions on Tuesday, the government requested that the December 2 court appearance be postponed to February 1, 2021. This would allow the government to iron out the details of the possible settlement.
Cosatu chief negotiator Mugwena Maluleke has rejected the government’s proposal, saying that government is “not ready” with its case and has therefore requested the proposal.
“It’s too late to ask for a postponement on the last day and we have done a lot of work to prepare,” he told Moneyweb.
The wage freeze is central to the government’s plans to rein-in the country’s spending and debt. October’s Medium-Term Budget Policy Statement showed that the wage cuts would result in a decrease in the budget deficit from 14.6% of gross domestic product (GDP) in 2020/2021, to 7.3% by 2023/2024. If this is done, it is projected to stabilise the gross national debt at 95.3% of GDP by 2025/2026.
These reductions on spending could save the fiscus R300 billion.
In court papers, the PSA argues that the government cannot solely place the blame of the state’s weakened finances on the outbreak of the pandemic.
Other issues such as the economy’s failure to grow and dwindling revenue collections over the last few years should also be considered as part of the precariousness of the public finances, the PSA says.
This is supported by the Treasury’s answering affidavit which concedes that, “ even before the Covid-19 crisis, tax revenues had not grown quickly enough to accommodate the pace of remuneration growth and had become increasingly unaffordable and had become, along with rising debt and debt service costs, a critical driver in the deterioration of SA’s public finances.”
PSA assistant general manager Reuben Maleka has accused the government of “running way…because they have a weak case.”
Maleka says the PSA is not in a position to consider “anything”that the government has placed on the table. He says both parties requested expedition of the matter and the government cannot claim that it is not ready to proceed.
Following Wednesday’s court appearance, unions affiliated with Cosatu plan to stage a sit-in at the Union Buildings on December 4, to demand President Cyril Ramaphosa’s response to a memorandum submitted during the national day of action on October 7.
Cosatu had called on the government to respect collective bargaining conventions and to comply with International Labour Organisation conventions regarding collective bargaining.