Government does not have to increase public wage bill if unaffordable: Labour expert

Reading Time: 3 minutes

Labour expert Puke Maserumule says the Constitutional Court ruling on the wage bill means that the government does not have to pay an increase in the public sector workers if it cannot afford it.

Maserumule says even if the government agreed to increase wages, it is now in a position to decide whether to pay workers.

In a unanimous ruling, the Constitutional Court said in the present economic and health circumstances facing the country, it will not be equitable to require the state to make salary increases, dismissing an appeal brought by unions.

Maserumule says unions would still be able to play an active role for workers in future.

“I don’t think it is necessarily a precedent what is to come in the future in terms of the state entering into collateral agreements and being able to wiggle out of them. In this particular case, the government was rescued by COVID because the court considered the fact that from an economic point of view fiscals were struggling for COVID. It was struggling even further. So unions will still be able to conclude collateral agreements and get them enforced,” says Maserumule.

Government wins wage bill battle:

On Monday, public sector unions lost their Constitutional Court bid to force the government to honour its 2018 three-year wage agreement.

Government reneged on some aspects of its collective wage agreement, citing lower tax revenue. The salary increase would have added R38 billion to the already high public sector wage bill.

The Constitutional Court dismissed the public sector union’s application for permission to appeal a 2020 Labour Appeal Court judgment. In that judgment, the Labour Appeal Court dismissed the unions’ application to enforce clause 3.3 of the collective agreement.

The said clause determined the public sector wage increases for the 2020/21 financial year.

South African Federation of Trade Unions (Saftu) General-Secretary Zwelinzima Vavi says they’re disappointed in the court’s ruling.

Vavi says, “They decided that workers, in the light of the difficulties faced by the capitalised class in 2008/09 now worsened by the coronavirus, that it is workers, not anybody else, who must pay and suffer the consequences of that. The Constitutional Court ignored all our arguments that South Africa doesn’t face a debt crisis and South Africa does not face a fiscal crisis. It is a policy choice, a government that is facing that fiscal crisis that resources are available in this country through taxation and through the wealth and solidarity; all of this has been ignored by the court.”

“We are extremely disappointed because this to them proves collective bargain into disarray and it makes any worker know up front that unless you win the battle in the streets through strike action, don’t ever take your battles to the courts because you’re more likely to lose,” added Vavi.

In his Budget Speech last week, Finance Minister Enoch Godongwana announced a marginal increase of 1.8% to the public wage bill for the current financial year. He also expressed concern over the rising debt levels that pose a risk to the fiscus.

The minister is expected to meet with labour unions next month to address the issue of the public sector wage bill.