Court dismisses public sector wage bill appeal

Labour unions in the public sector have been dealt a blow in their fight to have the government implement the final leg of a multi-year wage agreement.

On Tuesday, judges Dennis Davis, Phillip Coppin and Violet Phatshoane dismissed the application. They further found that the unions’ appeal for the courts to force the government to implement the final year of the 2018 wage deal contravenes section 213 and 215 of the Constitution and sections 78 and 79 of the Public Services Act.

Earlier this month, unions including the Public Servants Association (PSA), the SA Democratic Teachers’ Union, the National Professional Teachers’ Organisation of SA, the Health and Other Services Personnel Trade Union of SA, and the National Education, Health and Allied Workers’ Union (Nehawu) argued that government cannot walk away from the deal because it is a legally binding contract.

Read: Government cannot walk away from wage deal scot-free, court hears

Lawyers representing Public Service and Administration Minister Senzo Mchunu and Finance Minister Tito Mboweni argued that the government’s finances have drastically changed since the signing of the agreement and that it can no longer afford to implement the deal.

The implementation of the full wage deal would have cost the government an additional R30.2 billion (R6.2 billion for 2018/2019; R10.7 billion for 2019/2020; and R13.2 billion for 2020/2021).

Implementing the deal would also set back the government’s plans to rein in public spending – something which was recently flagged as a threat to stabilising spiralling debt by ratings agencies Moody’s and Fitch.

The R37.8 billion required to finance the wage increases, Mboweni says in court papers, comes at a time when the “rest of the country’s workforce (including higher-echelon public servants, Cabinet and Parliament) have accepted salary cuts or freezes as a consequence of the economic climate and Covid-19 crisis”.

Several attempts to resolve the issue in the Public Sector Bargaining Council throughout the year failed, leading to all the parties requesting arbitration.

In an effort to avoid heading to the courts on December 2, Mchunu offered the unions a settlement offer that includes a once-off cash bonus to public servants and a year-long pension payment holiday.

The offer to settle and postpone the matter was rejected by unions.

Read:
Unions reject government’s request to postpone wage bill court battle
Read full judgement here