Government holds firm in pay dispute with labour unions

Government is holding firm in a pay dispute with labour unions that represent more than 1.2 million workers, denying them promised increases as it seeks to rein in spending and resuscitate an economy battered by the Covid-19 coronavirus pandemic.

Taking a hard line with the public service labour unions is a risky move for President Cyril Ramaphosa, a former union leader who relied on their backing to win control of the governing ANC in 2017 and needs them to canvass for votes in next year’s municipal elections.

Under the 2018 agreement, government workers were granted raises of as much as one percentage point more than the consumer inflation rate this financial year.

In February, government said pay hikes would be limited to 1.5%, and last month it announced salaries would be pegged at prevailing rates. Salaries usually go up in April, with the first batch of workers paid mid-month.

“There is no adjustment. No one got any salary increase,” Reuben Maleka, spokesperson for the Public Servants Association (PSA), which represents more than 240 000 state workers, said by phone on Wednesday.

The union will file a lawsuit in the Labour Court to try and force government to implement the original pay accord, he said.

The way government has handled the pay talks is “unacceptable” and will strain its relations with the unions, said Sizwe Pamla, spokesperson for union federation Cosatu, a member of the tripartite alliance.

For now, Cosatu unions have declared a dispute with the state in the Public Service Bargaining Council, and will let that process run its course before deciding on further action, said Pamla.

The PSA is not part of Cosatu, and its lawsuit will run in parallel to talks in the council.

Vukani Mbhele, spokesperson for Public Service and Administration Minister Senzo Mchunu, said government would abide by the arbitration process.

Public servants last went on strike in 2010 that dragged on for three weeks before they were awarded an inflation-beating 7.5% raise.

Ramaphosa’s administration has little room to manoeuvre this time around – its debt had grown to unsustainable levels even before a five-week shutdown ordered to curb the spread of the Covid-19 coronavirus decimated growth and tax revenue. The central bank expects the economy to contract 6.1% this year.

– Bloomberg

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