Pretoria - The South African Revenue Service (SARS) is hopeful that an agreement will be reached in its wages dispute with the National Education, Health, and Allied Workers' Union (Nehawu) and the Public Servants' Association (PSA), and a strike will be averted, the tax collector said on Saturday.
Nehawu and the PSA had served SARS with a seven-day notice to go on strike from March 28, SARS said in a statement.
This followed a dispute organised labour lodged at the Commission for Concilliation, Mediation, and Arbitration (CCMA) in February. The CCMA issued a certificate of non-resolution on Tuesday, March 19. SARS enjoyed a good relationship with organised labour founded on the principle of a higher purpose that all SARS employees espoused, the statement said.
The current three-year wage agreement that SARS had with organised labour would expire on March 31. Consequently, SARS and organised labour, represented by the two recognised trade unions, Nehawu and PSA, started the current round of negotiations in November 2018.
"The negotiations started with a pre-bargaining conference facilitated by the CCMA in early November 2018. The pre-bargaining conference helped the parties to commit to good faith bargaining, conduct that speaks to openness, honesty, trust and a speedy resolution of the negotiations."
On November 20, organised labour jointly tabled its consolidated list of 26 demands. The demands included a 15 percent general salary increase on total package, plus 25 other demands. Management sought clarity on these demands with a view to understanding the cost implications and feasibility thereof. The negotiations proceeded in December, January, February, and March.
During the course of the negotiations, six demands were withdrawn, nine were referred to task teams between management and organised labour which would investigate and have further discussions post the wage settlement, and consensus was reached on three of the demands. The key demands that remained subject of negotiations were a general salary increase of 11.4 percent, term of the wage agreement, pay progression, provisions on family responsibility leave and prenatal leave, long service awards, and exit gifts.
"Given the current economic conditions, SARS finds itself in a very constrained fiscal position. In the spirit of openness and transparency, SARS agreed to set up a task team to look at the SARS financials. Several meetings took place where organised labour and SARS management looked for opportunities for cost savings that will improve the financial position of SARS going forward. Some of the proposals coming out of the task team will be implemented in the coming financial year," SARS said.
Due to the constrained financial position, SARS started with an offer of four percent salary increase for a three-year wage agreement linked to consumer price inflation (CPI). Organised labour revised their salary demand from 15 percent to the current 11.4 percent increase across the board for a single term. SARS revised its offer from four percent to the current seven percent differentiated increase.
When the parties went to the CCMA on March 8, organised labour was sitting at 11.4 percent plus the remaining demands. SARS had moved to six percent. The CCMA commissioner tabled a commissioner’s proposal for settlement of eight percent increase across the board for a single term.
He asked the parties to seek mandates from their principals and to return to the CCMA on March 13. Given the financial situation that SARS was in, SARS was able to move to seven percent differentiated increase, with a concession on prenatal leave, and agreement on long service awards. The family responsibility leave was deferred to a future discussion once the implications had been worked out.
Organised labour rejected the CCMA commissioner’s proposal and decided not to move from their 11.4 percent increase across the board, and insisted on all the other outstanding demands except for long service awards and exit gifts where there was agreement.
After further mediation by the CCMA commissioner, organised labour offered a nine percent increase as a settlement offer. SARS was not able to accede to this, and needed more time to consult with its principals. A meeting was scheduled for Monday for the parties to try and find each other on the remaining issues.
"SARS is confident that the meetings arranged for Monday and Tuesday through the chairperson of the SARS National Bargaining Forum will yield results, and a settlement will be reached. SARS is funded through a grant like all other government departments.
"Due to the shrinking revenues and growing debt levels, the three-year Estimate of National Expenditure (ENE) by National Treasury has reined in government expenditure over the next three years. Whatever wage settlement SARS enters, it should be within the ENE framework over the next three years."
SARS believed that the 11.4 percent increase demand of organised labour was out of reach in the current economic climate where CPI was at 4.1 percent as of February. SARS’s offer of seven percent was 2.9 percentage points above CPI. SARS had a great employment value proposition for its employees, and had been rated as a leading employer brand in the past few years.
"SARS is hopeful that an agreement will be reached and a strike will be averted. Both SARS and its employees remain committed to the higher purpose of collecting all revenues due to the state and facilitating legitimate trade in and across South Africa’s borders," SARS said.