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Administration and Public Service Minister Senzo Mchunu, who oversees public sector employment, met with the unions representing public servants on Monday, November 29 through a virtual meeting, where the settlement offer was presented. (Photo: Gallo Images / The Times / Jackie Clausen)
To finance a one-time cash bond, the Public Servants Association says the government has proposed to use the monthly contributions it makes to public servants’ pension savings, which are managed by the Government Employees Pension Fund.
To resolve a long-standing dispute over salary increases that will push SA into a fiscal abyss, the government proposed a settlement offer to 1.2 million public servants that includes one-time cash bonuses.
Administration and Public Service Minister Senzo Mchunu, who oversees public sector employment, met with the unions representing public servants on Monday, November 29 through a virtual meeting, where the settlement offer was presented.
So far, Mchunu has not disclosed details of the liquidation offer, but public sector unions, including the Public Officials Association (PSA), have covered it up. Mchunu’s office was not available to comment on the offer.
The offer is a big U-turn on the part of the government because, since February 2020, it has refused to implement the last tranche of a three-year salary deal that guarantees inflation-defying salary increases for civil servants.
The government has repeatedly argued that it cannot afford wage increases of between 4.4% and 5.4% for civil servants, depending on their pay scale, and that low- and middle-income earners get a higher percentage, saying that the Covid-19 pandemic has wreaked havoc. on public finances.
The government’s plan to cut spending by R300 billion over the next three years to control state debt depends on the implementation of salary freezes for public officials, including teachers, nurses, police officers and others.
Settlement offer cost
To implement the salary agreement, the National Treasury previously said that it would cost the treasury an extra R37.8 billion and that it would result in the total salary bill taking 60% of tax revenues. But the PSA, which attended Monday’s meeting with Mchunu, said that paying one-time cash bonuses to public servants will cost it R27 billion.
The government still needs more time to engage with the unions in the settlement offer, calculate the cost of the offer and determine whether the fiscus can take responsibility.
To finance the one-time cash bond, the PSA said the government had proposed to use the monthly contributions it makes to public servants’ pension savings, which are administered by the Government Employees Pension Fund (GEPF).
The PSA said that the one-time bonus would be calculated on the consumer price index of 3% as determined in September 2020, which “becomes the lowest-level employee who receives R4,000 and the highest-level employee receives about 52,000 rand once. ” -output of tax base ”.
Paying the one-time cash bonus using government contributions to public servants’ pension savings could have a detrimental impact on the GEPF, the PSA warned. The fact that the one-time cash bonuses have been valued at R 27 billion means that there could be a hole in the civil servant pension contributions on the GEPF books. As a defined benefit fund, any shortfall or hole in the GEPF will ultimately be paid by the fiscus, or the SA taxpayer.
Mugwena Maluleke, the chief negotiator for most of Cosatu’s unions, has described the one-time cash bonus offer as “disappointing”, Business maverick which has the effect that public servants finance the bonds themselves with pension benefits.
The PSA and other unions affiliated with Cosatu have rejected the conciliation offer and have chosen to go ahead with the lawsuit against the government in the Labor Appeal Court to enforce the wage agreement. The government wants the court case postponed after February 2021, which would give it more time to negotiate with the unions on the settlement offer.
But the case went ahead on Wednesday, December 2, and the ruling was reserved. Some unions, including the National Union of Education, Health and Allied Workers, told the court that although the first prize would be to enforce the wage agreement, they are willing to continue working with the government on a “remedy” for the dispute.. DM / BM
