Treasury ready for legal fight with unions on public service wage hikes

In its responding papers to the Labour Court application made by the unions, Treasury said the workers who had been beneficiaries of decades of above-inflation salary increases should understand the exceptional circumstances in which government found itself.

JOHANNESBURG – As public servants unions wait eagerly for the Labour Court to set down a date for the hearing of its case against the State over salary increases this financial year, Treasury appears prepared to fight at every turn.

The unions have been up in arms since National Treasury made it clear it had no money to pay for the yearly wage increases, which were agreed to in 2018.

Not only that, but the entity responsible for the management of public finances is also arguing that no mandate was provided to government negotiators to conclude the deal, which has now come back to haunt it.

In its responding papers to the Labour Court application made by the Public Servants Association and the South African Democratic Teachers’ Union, among other unions, National Treasury said the workers who had been beneficiaries of decades of above-inflation salary increases should understand the exceptional circumstances in which government found itself.

While government negotiators agreed to the increases that would have hiked workers’ wages by up to 5.4%, National Treasury has also backed down on this commitment.

It stated that there had been a material change of circumstances which made the clause in the 2018 agreement unenforceable.

Among these changes, Treasury cites the COVID-19 pandemic – saying its consequences on the public purse were unforeseen, as were the adverse fiscal developments predating the crisis.

The department makes it clear that should government prioritise the needs of public servants, who it says have not expressed financial hardships due to the failure to implement the agreement – this will be at the expense of the delivery of basic services such as education and social welfare.

It also cites its failed venture to offer public servants early retirement packages, which it blames the unions for opposing.

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