South Africa: Highest court rejects 3-year wage deal, public sector unions decry ‘cost-cutting’ tactic

By Xolisa Phillip, in Johannesburg
Posted on Monday, 7 March 2022 14:51

Members of the National Education, Health and Allied Workers' Union (NEHAWU) protest at the government's Union Buildings in Pretoria, South Africa, Thursday, Sept. 3, 2020.
Members of the National Education, Health and Allied Workers' Union (NEHAWU) protest at the government's Union Buildings in Pretoria, South Africa, Thursday, Sept. 3, 2020. (AP Photo/Themba Hadebe)

South Africa’s National Education, Health and Allied Workers Union (Nehawu) is “disappointed but not surprised” after the highest court declared invalid a three-year wage agreement with the state. Undeterred, Nehawu officials have hit the ground running, in all nine provinces, to gather mandates from members as public sector unions prepare for a fresh round of wage negotiations with the state later in March.

Last week, the Constitutional Court delivered the judgement on the controversial agreement that had been concluded in 2018, and was effective for 2018/19, 2019/20 and 2020/21.

The state had honoured the 2018/19 and 2019/20 portions of the agreement, but reneged on the 2020/21 implementation, citing budgetary pressures and constraints due to Covid-19.

The court found that although the state had honoured the first two years of the agreement, the whole deal was invalid because the department of public service and administration, which negotiates public sector wages on behalf of the state, failed to obtain the required approval from the National Treasury.

Effectively, this means that the state does not have to find additional funds – estimated at upwards of R30bn ($1.95bn) – to pay for the 2020/21 year of the agreement, which would have run from 1 April 2020 to 31 March 2021.

Under attack

December Mavuso, Nehawu’s deputy general secretary, vows that the union will defend collective bargaining, which it believes is under attack.

Speaking from Mpumalanga where he is gathering members’ mandates, Mavuso tells The Africa Report that Nehawu will no longer enter into multi-year wage agreements with the state, but will instead change tactics and seek one-year determinations.

“Workers are determined to fight. As we are speaking, we are on the ground – all national office bearers of Nehawu. I’m in Mpumalanga, I have been here since Monday. The rest of [the office bearers] are in other provinces,” says Mavuso.

We cannot allow economic circumstances to blackmail us and cause the principle of collective bargaining to be thrown out the window.

Nehawu and the South Africa Democratic Teachers Union (Sadtu) are among the public sector unions that had lodged challenges to the state’s decision not to implement the final year of the wage deal.

Nehawu and Sadtu are both affiliates of the Congress of South African Trade Unions, a tripartite alliance with the governing African National Congress (ANC) and the South African Communist Party. Sadtu is the largest union in the public sector.

In response to the judgement, Sadtu says: “We cannot allow economic circumstances to blackmail us and cause the principle of collective bargaining to be thrown out the window.”

The Public Servants Association (PSA) says: “While the PSA maintains … employees deserve to get what was promised to them by the concluded agreement, it respects the decision of the court and will study the judgement to determine the appropriate way forward.”

The fight continues

The affected state employees include teachers, the police, healthcare workers, home affairs officials and others in agencies, such as the South African Revenue Service and the South African Social Security Agency.

“We are talking to members. The spirit is high. They are not demoralised by this judgement. In fact, we are not shocked. We are not surprised. We are disappointed, but we are not surprised,” Mavuso says.

The unfortunate thing is that they are targeting public servants. There’s no cost cutting on the other areas of spending.

Mavuso states that Nehawu will not enter into a three-year agreement. “It’s better we conclude a 12-month agreement. It gets implemented [and] we come back the following year – and so on and so on.”

In terms of preparations for a new round of wage negotiations, mandating processes are said to be taking place. Currently, unions are consulting members for mandates and it is on this basis that public sector unions say they will enter into negotiations with the state at the Public Service Co-ordinating Council.

“We’ve agreed that we should try and consolidate our demands by 15 March, so that the week of 20 March we can then meet with the employer and table the demands. That is when the negotiations are likely to start,” Mavuso says.

Nehawu is hopeful that other public sector unions will follow its stance on rejection of multi-year wage agreements with the state.

“One can understand from the unions’ point of view that they probably have good reason to complain about this, especially since there was a signed agreement: it was a three-year deal. The basic laws of contract are that s/he who contracts is bound by the contract,” Patrick Deale, a labour lawyer and commercial mediator, tells The Africa Report.

One way around this could be: “Unions having a better say in the budgeting process, in the pre-negotiations, [and this is] useful so that they don’t go into negotiations knowing that the state’s hands are tied,” says Deale. The labour lawyer believes that the judgement strengthens the state’s hand ahead of the new wage talks slated to commence later in March.

Cost-cutting

In its judgement, the Constitutional Court said: “In the present economic and health circumstances facing the country, it would not be just and equitable to require the state to make good the illicit salary increases it promised at the expense of far more pressing needs affecting the country.”

A budget review that was published on 23 February immediately after the minister of finance’s budget speech said the National Treasury underscores the fact that “a new round of … bargaining will begin in March 2022.”

“The National Treasury is working with the department of public service and administration to keep the compensation baseline within affordable limits. A … wage agreement exceeding the rate of growth of the compensation budget would require additional fiscal measures to contain overall compensation spending or reductions in headcounts,” the review says.

However, Nehawu has strongly rejected the notion of cost cutting as an effective tool to curb state expenditure.

We are going to talk about what needs to be done to strengthen the public service, and collective bargaining.

Mavuso counters that Nehawu considers this an austerity drive mainly targeted at frontline workers in the public service. “The unfortunate thing is that they are targeting public servants. There’s no cost cutting on the other areas of spending.”

Nehawu recently met with the minister of public service and administration to prepare for the Public Service Summit scheduled for later in March.

At the summit, Mavuso says “we are going to talk about what needs to be done to strengthen the public service, and collective bargaining”.

Look elsewhere for spending cuts

According to Nehawu, public servants have been suffering since 2015. The union highlights the fact that vacancies are not being filled, professionals are being overworked, collective bargaining agreements are not being implemented and benefits are being cut. These are all issues that the union says it has raised with minister Dlodlo.

Nehawu insists that it’s now time for the state to “look elsewhere” to institute spending cuts. Mavuso bemoans the fact that, even at the height of Covid-19, corruption within the state – particularly in contracting for professional services – had run rampant and looting did not slow down. “That is where wastage is happening.”

Does the judgement weaken labour going into the new round of public sector negotiations? “Well, we don’t think so. We are more determined to defend collective bargaining. Collective bargaining has been under attack for the past few years. The Covid-19 period has intensified this attack – we’ve seen it,” Mavuso says.

Public service and administration minister Ayanda Dlodlo is expected to meet with labour unions to discuss the impact of the judgement and “to ensure trust and respect between labour and the employer remains intact”, according to a statement released by the department.

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