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The Labor Appeals Court heard how Covid-19 has seriously affected the government’s ability to comply with wage increases.
- The government cannot afford wage increases this year for state employees, the Labor Appeals Court has heard.
- The unions, however, want the government to fulfill its obligation of a three-year wage agreement, even if it means establishing a back pay agreement.
- The judges expressed concern that the Covid-19 pandemic may have affected the government’s ability to pay raises.
The Covid-19 pandemic has severely affected the government’s fiscal position, making it impossible to pay raises for public sector workers this year, a court has heard.
The Labor Appeal Court on Wednesday heard arguments from public sector unions seeking a court order to implement pay increases for the final year (2020) of a three-year wage agreement signed in 2018.
The government reneged on the deal this year as part of a plan to cut the state’s wage bill by R160 billion over the next three years.
Justices Dennis Davis, Violet Phatshoane and Philip Coppin heard that the Covid-19 pandemic had added different spending pressures on the government, which now has to focus on alleviating the plight of the vulnerable and saving lives and livelihoods.
Treasury attorney, attorney Jeremy Gauntlett, made it clear that Treasury’s hands are “empty.”
However, attorney Chris Orr, representing the Public Officials Association, said that the Treasury – is bound by the deal, as the finance minister was part of the cabinet meeting, which ultimately approved the proposal.
Judge Davis noted that circumstances have changed in the past three years, given the pandemic, which nearly caused the economy to collapse.
In response, Orr quoted the Treasury as saying it could pay for the pay increase, but that it would require cuts. That is unlikely to happen and the parties may have to return to the negotiating table.
Advocate Ngwako Maenetje, who represented three unions, argued that the government’s decision not to abide by the agreement is not solely due to Covid-19. The country had been downgraded to garbage category before the pandemic, he added. He pleaded with the court not to allow the government to “walk away” completely from its obligations. Maenetje said one remedy would be for the court to order the parties to renegotiate an appropriate waiver.
Scott free
Lawyer for the National Union of Education, Health and Allied Workers, William Mokhare, similarly argued that the government should not be allowed to go “scott-free” and must meet its obligations. This could involve making back pay arrangements for workers.
Mokhare said the government had not played “open cards” about its ability to pay raises by first trying to challenge the legality of the wage deal. He said the fact that all relevant ministers were at the Cabinet meeting, including the president, meant there was “full compliance” when the decision to approve it was made when the offer was made.
When asked how the unprecedented circumstances caused by the pandemic could affect compliance with the agreement, Mokhare said that “the court must encourage the state to respect its obligations.
He said allowing the government to walk away from the deal due to Covid-19 could be compared to allowing people to walk away from their debt obligations.
“South Africa is a young democracy, still finding its way to full compliance, the state should be leading by example,” Mokhare said.
The judgment is reserved.
