Picture: ISTOCK
Picture: ISTOCK

The government and its employees have once again failed to reach a settlement in crucial wage talks that will have a decisive effect on the state of SA’s public finances.

On Tuesday, trade unions and employer facilitators resolved to adjourn negotiations to give the government time to number-crunch various options after a lengthy horse-trading session failed to reach resolution. The government’s latest offer made on May 4, proposed a pay increase 6% to 7% for 2018-19 and consumer price index (CPI) plus 1% to CPI plus 0.5% for the successive two years.

Unions have demanded CPI plus 2% for the lowest levels and CPI plus 1% for the highest.

Labour has set its CPI calculation at 5.5%.

The Treasury is under pressure to contain the public service wage bill, which has been growing faster than inflation and consumes 35% of its total expenditure.

Credit-rating agencies in particular argue that the budget needs to be rebalanced away from consumption towards investment. This year’s budget pencilled in a wage increase of 7.3% a year. Organised labour and employers in the state have been in talks since September 2017.

The Independent Labour Caucus’s Basil Manuel told Business Day on Tuesday that these were among the considerations labour had to weigh up when making its demands, although members were "growing impatient". However, the unions were no longer on the same page, according to the union leaders Business Day spoke to.

The organisations, which had collated their demands at the start of talks, have according to sources gone their separate ways in the council as they pursued competing interests within the broader public service.

This has also pitted some of labour federation Cosatu’s biggest unions against one another, making talks even more difficult. While the biggest two unions in the sector — the Public Servants Association (PSA) and the National Education Health and Allied Workers Union (Nehawu) — have rejected the offer, the majority of the unions have expressed unhappiness about some parts of the proposed deal.

Business Day understands that while unions with a wide scope in the public service such as the PSA and Nehawu were fighting for the removal of levels 1 to 3 in order to improve the wages of low-skilled employees, others such as the South African Democratic Teachers Union were pursuing the equalisation of pay progression for its members.

Other outstanding issues in the talks include disagreements between the employer and unions on whether the state has placed a moratorium on the filling of vacant posts, with labour insisting an agreement is reached stating government will lift all moratoriums.

On Tuesday, the PSA said it was angered by the employer’s "ill-preparedness".

The union was also engaged in conciliation talks on the sidelines of the negotiations after it declared a dispute over delays in the talks. PSA assistant manager Tahir Maepa said: "This [Tuesday’s talks] is yet another illustration that the only way out of this oblivion is for labour to collectively accept that these negotiations have failed."

Another meeting has been scheduled for Thursday, when the government is expected to present a reviewed offer.