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State, unions butt heads over wage bill

2020-03-23 15:50

Government and unions remain at loggerheads over the proposed cutting of the public sector wage bill, but negotiations between the two parties on an urgent stimulus plan to assist employers and employees amid the Covid-19 coronavirus pandemic are gaining traction.

Unions and government crossed swords at the Public Service Coordinating Bargaining Council (PSCBC) last week, with Public Service and Administration Minister Senzo Mchunu – to the fury of unions – proposing that “certain sections” of the collective bargaining agreement be “revisited and renegotiated”.

In terms of an agreement reached in 2018, public sector wage bills were due to increase up to 7% – or under the consumer price index plus 1% – on April 1, depending on job grade.

However, according to SA Democratic Teachers’ Union (Sadtu) general secretary Mugwena Maluleke, who attended the negotiations with government, Mchunu suggested a renegotiation of this section of the agreement in accordance with the announcement by Finance Minister Tito Mboweni to slash the public sector wage bill by R160.2 billion over three years.

Read: Cosatu: Mboweni broke trust between government and workers

“What happened was that government [Mchunu] came to the PSCBC with the suggestion that, as much as they wanted to implement the collective agreement, they were only willing to do so following a review of certain sections of that collective agreement,” said Maluleke.

He added that the minister suggested a review of “clause number three of the collective agreement”, proposing that, instead of increasing workers’ salaries in accordance with the inflation rate plus 1%, workers would only get an inflation rate-adjusted increase.

A Cosatu affiliate, the National Education, Health and Allied Workers’ Union (Nehawu), has already flatly rejected the proposal and announced a strike.

This is in spite of measures announced by President Cyril Ramaphosa to reduce the spread of Covid-19 which restrict gatherings to no more than 100 people in one place at a time.

Read: Will Cyril Ramaphosa blink on wage bill after pressure from Cosatu?

“The reneging by the government on the full implementation of the wage agreement constitutes a frontal attack on workers and their hard-won gains,” said Nehawu spokesperson Khaya Xaba.

According to Maluleke, other unions, although not in agreement with government, have taken a more cautious approach.

“Unions have said: ‘Look we will come back to you. Give us your proposal and we will take it to our members and take our mandate from the workers. Then we will come back and state our position.’ Besides this, unions did indicate that as it [government’s proposal] currently stood, we are not accepting the attempt to tamper with this particular collective agreement,” he said.

Public service and administration department spokesperson Vukani Mbhele would only say: “We are still engaging with unions and are therefore not in a position to make any statements.”

While negotiations on the proposed wage bill cuts were facing opposition at every turn, Cosatu spokesperson Sizwe Pamla said demands by unions from the ministries of labour and health regarding protective clothing and gear to all frontline workers had been committed to by government.

“The practical details must still be fleshed out in specific workplaces and sectors. But yes, the principle is that employers must provide the necessary protective gear to workers to minimise infection. Government and industry need to ensure that a sufficient supply of protective items such as masks, gloves, hand sanitisers and disinfectant spray is available, and that stock is replenished and does not run out,” said Pamla.

Cosatu also welcomed the announcement of a temporary Unemployment Insurance Fund (UIF) contributions holiday by Labour Minister Thulas Nxesi to assist employers and employees.

“Cosatu has also asked for the UIF to drastically increase the availability of UIF funding to assist distressed workers and companies. This must be done by increasing funding available to the UIF’s temporary employment relief scheme. The UIF and government must increase its administrative capacity so that it can respond to workers and industries within days, and not the months that workers and industries experience,” said Pamla.

He added that at the negotiations last week “government and the private sector were tasked to present urgent stimulus plans. From government, contributions towards such a plan need to come from the fiscus and the key development finance institutions such as the Public Investment Commission, the Development Bank of Southern Africa, the Industrial Development Corporation of SA, the Land Bank and other state banks, as well as disaster management funds. From the private sector it needs to come from the banks and investment and pension funds.”

According to Pamla, much work needed to be done, as a matter of the highest urgency, to assist workers with relief arrangements with banks if they had loans and bonds.

While negotiations on the proposed wage bill cuts were facing opposition at every turn, Cosatu spokesperson Sizwe Pamla said demands by unions from the ministries of labour and health regarding protective clothing and gear to all frontline workers had been committed to by government.

“In essence, the banking sector has a huge role to play. These are unprecedented times which need decisive, bold and creative solutions. Italy, France, Germany, the US and other countries have set positive examples.

The banks need to now come to the party and defer all loan repayments for a month. This will provide massive and immediate relief to workers, businesses and the economy. It is not a write-off, but a simple deferment. It will have a much bigger impact than any other intervention that government or the private sector could offer. It is affordable, because the banks have R7 trillion worth of assets,” he said.

City Press understands that Nxesi also proposed engagements with banks, particularly to seek relief for workers owing loans and bonds, who may be affected by the virus and find themselves financially unable to honour their monthly repayments.

The National Union of Metalworkers, through its spokesperson, Phakamile Hlubi, expressed disappointment “that to date our government has not proposed enough measures to cushion the working class and the poor against the negative effects of the coronavirus outbreak”.


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March 29 2020