The SA Revenue Service (Sars) has finally resolved its long-running dispute over salary increases and agreed to settle on a 2.3% back pay from April 2021 and a 1% wage hike from next month.
The Public Servants Association (PSA) has been battling Sars since 2021 and the union told the “Sunday Independent” that the majority of its members accepted the settlement offer.
According to the PSA, Sars will pay 2.3% as back pay for the years 2021-2023 and implement a 1% salary increase from April 1, this year, after the overwhelming majority of the 10 400 employees in the bargaining unit voted to accept the deal.
In terms of the settlement agreement, Sars will pay employees by the end of this month but no later than April 15, or the agreement will collapse.
The out-of-court settlement means the end of Sars’ application for leave to appeal the November 2023 North Gauteng High Court ruling handed down by Judge Elizabeth Kubushi forcing the revenue collection agency to honour the agreement to increase salaries signed by the PSA and the National Education, Health and Allied Workers' Union (Nehawu).
Sars claimed that it aborted its application for leave to appeal in December last year due to the agency and its commissioner, Edward Kieswetter, preferring the settlement discussions to be a measure of good faith and to build trust.
Sars’ head of employee relations and labour, Sobantu Ndlangalavu, told the high court that Kieswetter implored the PSA and Nehawu to build something special at Sars and the country as well as showcase that the taxman’s management and unions can work together.
“It was always understood and accepted by all that the applicants (Sars and Kieswetter) kept open the option of an application for leave to appeal should the settlement negotiations fail. It was understood by all that the applicants did not perempt (quash) their right to appeal,” added Ndlangalavu.
However, the PSA’s Mpumalanga chairperson, Dalinda Swart, disputed Sars’ version and stated the unions attended about six meetings between December and last month but that this was an attempt to reach an agreement as to the manner in which Judge Kubushi’s ruling would be implemented by Sars and Kieswetter.
“The discussions during meetings were accordingly ‘without prejudice’. No agreement was reached pursuant to the ‘without prejudice’ discussions held between the parties in order to bring this matter to an amicable conclusion,” she explained.
Swart continued: “At no point prior to or during the discussions was it agreed that the applicants’ (Sars and Kieswetter’s) withdrawal of their application for leave to appeal on December 13, 2023, was provisional. The PSA understood the applicants’ withdrawal of their application for leave to appeal to be final.”
In addition, according to Swart, at no point during the discussions did the parties agree to a suspension of the statutory time periods applicable to applications for leave to appeal.
Among the reasons cited by Sars for not increasing its employees’ salaries were funding deficits between R2.35 billion in the 2022/23 financial year and R3.5bn in 2024/25.
Kieswetter proposed paying a lower once-off gratuity and a once-off allocation to the employees’ pension, which could be funded from the savings of the current financial year’s (2023/24) budget.
He indicated that the requisite funds are not available to fund full implementation of the wage agreement.
Meanwhile, following this week’s meeting of the Public Service Coordinating Bargaining Council, the government also announced that hundreds of thousands of public servants who are not senior managers would receive a 4.7% salary increases from April 1.
Public Service and Administration Minister Noxolo Kiviet said the 4.7% pay hike showed the government’s commitment to fair compensation and provision of quality services.
”Considering the current economic climate and the need for fiscal discipline, the government will implement a 4.7% salary increment for public servants in 2024,” explained Kiviet.