In a quest to avoid a strike on the eve of the 2019 general election, the government has tabled a draft wage agreement with several proposals favourable to labour unions.
The implementation of these proposals could lead to a surge in the public wage bill, which the Treasury has been trying to contain.
Trade unionists say the coming election was not the only factor that pushed the government to return to negotiations with a renewed mandate.
Cosatu, the biggest bloc at the public sector bargaining council, backed Cyril Ramaphosa during his 2017 campaign to lead the governing party.
The stakes were high for both the deputy president and the unions, but insiders said the federation did not want to challenge Ramaphosa on the streets.
The details were contained in a draft agreement, seen by Business Day, which was tabled by government negotiators at the Public Service Co-ordinating Bargaining Council last week.
Although there was no agreement on salary adjustments, the government has given in to a number of demands, such as the removal of a spousal-benefits restriction that extended housing allowances to only one spouse if a couple is employed in the public service. The unions have been demanding that the government scrap the housing policy, which was implemented by the apartheid government.
In return, unions agreed to lower their demand for housing allowance increases from R2,500 a month to R1,500. The establishment of a bursary scheme for children of public servants was one of the conditions agreed to.
Another victory for labour was an agreement that the Public Investment Corporation would create a housing
investment portfolio that would direct investment into a
An "advisory body" would be established to give effect to the resolution. But despite these concessions, pay talks were still at a sensitive stage, with no agreement on increases.
The government has offered to hike pay for employees on levels one to seven by the consumer price index (CPI) plus 1.5%; levels eight to 10 by CPI plus 1% and levels 11 and 12 by CPI only for the first year of the three-year deal. The consumer inflation rate is 4.7%. The offer made by the government still falls short of labour’s demands.
Workers now want salaries increased by CPI plus 3% for the lowest levels, with a 2% adjustment for levels eight to 10 and 1% for 11 and 12.
The Department of Public Service and Administration did not respond to queries.