Barely a week after Finance Minister Nhlanhla Nene tabled his latest Budget, seven unions in the public service are threatening to strike over a salary increase.
International rating agencies, which assess the government’s ability to repay its debt, will be closely watching how the negotiations between the public unions and the government proceed and if the government keeps to its cost containment goals.
Public sector unions tabled a demand for a 15 percent salary increase in September, while the government offered an increase of 5.8 percent in line with inflation over three years in December.
What has angered the unions is that the government cut its offer to 4.8 percent on Monday, in line with the inflation rate of 4.4 percent for the year to January.
The current wage agreement expires on March 31.
Bad faith
The seven labour affiliates of Cosatu said on Tuesday: “Since the dawn of the democratic public service collective bargaining dispensation, such bad faith negotiating has never happened. We had thought by now, labour and the employer had developed trust.”
The seven Cosatu unions are: SA Democratic Teachers Union (Sadtu), National Education Health and Allied Workers Union, Police and Prisons Civil Rights Union, Democratic Nursing Organisation of SA, SA Medical Association, SA State and Allied Workers Union and Public and Allied Workers Union of SA.
They called on the government to come back to the negotiating table with a revised offer. “If the employer fails to adhere to this call, we will act decisively.”
Asked yesterday what this threat meant, Nkosana Dolopi, the Sadtu deputy general secretary, who speaks on behalf of the seven unions, said: “We will use our economic power.”
He said: “The employer is provoking, angering and insulting the workers. Who will take a downgraded offer? It has never happened before and will never happen now.”
Nene tabled a Budget that included cost containment measures, as well as intensified efforts to improve efficiency in expenditure. Personal income tax and the fuel levies have been raised as part of his efforts to reduce the country’s budget deficit.
Consolidated non-interest expenditure will rise from R1.123 trillion this year to R1.4 trillion in the 2017/2018 period, which is an average of 2.1 percent a year.
The share of personnel compensation is projected to remain at about 40 percent of non-interest spending.
Nene has said that the government can only afford an inflation rate plus 1 percent hike in public sector salary increases.
In another development, the biggest union in local government, the SA Municipal Workers Union (Samwu), has also threatened to go on strike after wage negotiations with the SA Local Government Association (Salga) reached a stalemate.
Samwu is currently in the first round of negotiations with Salga, which represents the country’s 278 municipalities in the SA Local Government Bargaining Council.
The union’s spokesman, Papikie Mohale, said yesterday that Samwu wanted a 15 percent wage increase or R4 000, whichever was greater.
It also wanted a single-year agreement instead of three years.
Samwu said Salga had insisted on a three-year agreement, which consists of a 4.4 percent salary increase for the 2015/2016 fiscal year, and consumer price index (CPI) inflation plus 0.25 percent for the following two years.
Ridiculous proposal
“We are shocked that Salga would even make such a ridiculous proposal for the year 2015/2016 of 4.4 percent, which is way below inflation. The National Treasury has forecast inflation to reach 6.2 percent in 2015. This, in essence, means the employer is proposing a real salary decrease of 1.8 percent,” Samwu said.
The union said it was in fact opposed to the CPI as a base for negotiations. It said it believed that CPI was not an economic variable because it failed to take into account real increases and was merely a measure of spending trends.
If the two strikes take place at the same time, all three spheres of government will come to a virtual halt.
The last strike in the public service sector in South Africa was in August 2010 and lasted for three weeks. That strike was estimated to have cost the economy R50 billion.