PSA encounters new hurdle in pay talks as state tables 4.7% offer

Public sector unions affiliated with the Federation of Unions of South Africa (Fedusa) that abandoned the 2022/2023 salary negotiations faced a new hurdle when the government tabled a below-inflation offer of 4.7% for the 2023/2024 financial year.

Last week, some Fedusa unions – including the 235 000-strong Public Servants Association (PSA) – said they were ready to commence a fresh round of negotiations pertaining to the new year.

The talks were kickstarted at a special council meeting at the Public Service Co-ordinating Bargaining Council (PSCBC) on Friday, which the Congress of South African Trade Unions (Cosatu) and the South African Federation of Trade Unions (Saftu) were opposed to attending.

Speaking to Moneyweb on Monday, PSA spokesperson Claude Naicker said the employer, through the Department of Public Service and Administration (DPSA), tabled an offer of 4.7%.

The offer is lower than the 5.4% average inflation expectation the South African Reserve Bank (Sarb) sees for 2023 and is in line with its average expectation of 4.8% for 2024.

Asked to comment, the DPSA said the employer’s position was not to conduct negotiations through the media.

PSA labour relations officer Jannie Oosthuizen said while the union has not set its demand, it is looking to propose a salary increase in the region of 10%.

‘Strange move’

Naicker said the non-pensionable R1 000 cash gratuity that is expected to fall away at the end of next month, which is a big point of contention for many of the unions, had been converted into pensionable pay in the government’s new offer – which he describes as a strange move by government.

“The employer tabled an offer first … which is something that has never happened before, but nothing prevents any party from proposing an offer,” he said.

According to Naicker, effective from April this year, the state will take the cash gratuity and convert it into a pensionable salary increase, which equates to about 4.2%.

“In addition to that, they’ve added another 0.5%; so all in all, you’re sitting with 4.7%…  as an increase for public service [workers] going into the 2024/2025 financial year,” he said.

Before presenting the government with a new demand for salary increases, the PSA said it will be consolidating with other unions, including those affiliated with Cosatu and Saftu, which it hopes to have done by Thursday.

Thereafter, it said, it can resume the negotiations.

‘Resolve 2022/23 wage dispute first’

In contrast, Richard Mamabolo, media and communication officer for Popcru and spokesperson for Cosatu, and Lwazi Nkolonzi, spokesperson for the National Education, Health and Allied Workers’ Union (Nehawu), have said workers under their representation will not be engaging in any talks related to the 2023/2024 year.

“We did not attend the so-called special council. Whatever decisions that were taken there we do not consider,” he said.

Mamabolo reiterated that they are not willing to move on to new talks without having concluded the 2022/2023 negotiations.

“Our contention is that the 2022/23 wage dispute has not yet been resolved, and we feel the 2023/24 wage negotiations cannot ensue without having settled this current debacle.

“We are back at our initial demand of 10% for the 2022/23 financial year,” he added.

Strike notices

“We will be handing over a memorandum of demands on Wednesday both in Cape Town and Pretoria. We will also be issuing a notice of strike on the same day,” said Mamabolo.

Saftu and Cosatu will also hand over strike notices on Wednesday.

This is the same day Finance Minister Enoch Godongwana, who has the tough task of achieving balance in the national budget, will be delivering his budget speech.

Godongwana’s priorities include reining in spending and guarding against the state’s ballooning wage bill, which, at the current level of R665 billion, makes up a third of government expenditure.

Adding to the pressures on government’s budget is debt-laden power utility Eskom. The government has committed to taking over a portion of Eskom’s debt, which currently stands at R422 billion and has been flagged as a risk to South Africa’s fiscal position by credit rating agency Standard & Poor’s.

Godongwana said in his Medium-term Budget Policy Statement last October that the government would take over R266 billion of Eskom’s debt.