Cosatu members. Picture: REUTERS
Cosatu members. Picture: REUTERS

The government lost its first court battle on the public-sector wage bill, after its attempt to have the arbitration process postponed was dismissed by the labour court.

The department of public service and administration and the Treasury had approached the court to postpone arbitration proceedings pending the outcome of a court case challenging the government’s decision not to implement a standing wage agreement to increase public servants salaries, as of April 1.

The battle with public-sector unions over the implementation of increases for public servants, as agreed on in the final year of a multiterm wage agreement, started after finance minister Tito Mboweni pencilled in huge cuts to the public-sector wage bill in February, in an attempt to trim the budget deficit.

In the light of that, the government did not increase the wages as per the agreement, and that decision is now subject to both court and arbitration proceedings.  

The judgment, handed down on Thursday by judge Edwin Tlhotlhalemaje, dismissed the government’s application. This means arbitration proceedings instituted to settle the dispute at the Public Service Co-ordinating Bargaining Council (PSCBC) by Cosatu public-sector unions the  National Education, Health and Allied Workers Union (Nehawu), Democratic Nursing Organisation of SA (Denosa), Police and Prisons Civil Rights Union (Popcru) and SA Democratic Teachers Union (Sadtu), will be able to continue.

In the judgment, Tlhotlhalemaje detailed what was at stake with the implementation of the increase. The implementation of the agreement would have cost the government an estimated R37.8bn.

“The state contends it does not have the money given the present macroeconomic circumstances coupled with other factors such as the current Covid-19 pandemic. It further contends that for it to meet its obligations under clause 3.3, it would have to borrow the funds from somewhere, at a cost of R70bn,” the judgment read.

While the Cosatu public-sector unions opted to go to arbitration, the Public Servants Association, the National Professional Teachers Association (Naptosa), the Health and Other Services Personnel Trade Union of SA (Hospersa), the SA Teachers Union (SAOU) and the National Teachers Union (Natu) went directly to the labour court to enforce their contractual rights in the matter.

The government argued in the labour court that the issue of the implementation of the final year in the multiterm wage agreement signed in 2018, should not be heard in two different forums.

The dispute in court was therefore not concerned about the merits of the issue, but was procedural in nature “in the light of the dilemma posed by the two separate and simultaneous disputes in different forums”.

“The applicants contend that in both matters, the unions seek the same relief, and that the issues and the defences to be raised are the same,” according to the judgment.

The court said it was not satisfied that the applicants made the case for the relief they sought.

 “Ultimately, the ‘procedural traffic jam’ occasioned by the simultaneous claims can only be sensibly and practically unblocked by allowing each process to stick to the rules and prescripts of the legal routes chosen, and as designed by the established dispute resolution mechanism provided for in the LRA (Labour Relations Act),” Tlhotlhalemaje said.

 “Whether those routes will ultimately converge in the light of the common destination, must first ... be determined at the traffic control point, which is the PSCBC,” he said.

 “However, it needs to be mentioned that all the parties, inclusive of the PSCBC, are well aware of the national importance and public interest in this matter, and the need for it to be expeditiously dealt with,” he added.

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