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Public sector unions affiliated to labour federation Cosatu as well as the treasury have compromised to prevent a strike that would have embarrassed President Jacob Zuma months before the ANC's Mangaung conference.
Public Service and Administration Minister Lindiwe Sisulu this week announced that labour and the government had agreed on a multiyear salary increase of 7%, a move that has angered some union leaders and the treasury.
The increase will put the total wage bill at R353-billion – 5% for this year and R6.5-billion more than what the treasury budgeted. Initially, labour demanded a 10% salary increase and the state offered 6.5%.
Senior union officials involved in the process told the Mail & Guardian that senior Cosatu leaders, including its president, Sdumo Dlamini, National Education, Health and Allied Workers' Union general secretary Fikile Majola and South African Democratic Teachers' Union (Sadtu) general secretary Mugwena Maluleke, held behind-the-scenes talks with senior ANC leaders and Cabinet ministers to find a political solution to the six-month wage impasse.
A strike by the country's 1.3-million public servants could have further embarrassed Zuma, whose administration has come under heavy criticism for its failure to deliver textbooks to thousands of Limpopo pupils.
Unlike the ANC Polokwane conference in 2007, Cosatu is divided over whether to support Zuma's re-election. Those who support him in Cosatu include Dlamini, Majola and Maluleke. Cosatu general secretary Zwelinzima Vavi and Sadtu president Thobile Ntola are among those who favour a change of party leadership.
A senior Cosatu leader, who did not want to be named, said union negotiators had been shocked to receive SMSes to come in to sign the agreement.
"We signed the agreement, with the back pay from May 1 instead of April 1, without even consulting our members," he said. "There was a rush. I don't know why. One of the biggest fights we had in 2007 was that the back pay should start from 1 April.
"I am surprised that even Sadtu, which historically refused to shift from its original demand, signed without any hassle this time around. I wouldn't regard it as wage negotiation, but [as] political engagement."
For the first time in years the unions also accepted a multiyear agreement and a performance-based incentive for new employees.
People close to the process told the M&G that the treasury was put under heavy pressure by senior ANC and government leaders to make concessions, including agreeing to the 7% increase.
A treasury spokesperson said: "The outcome of the wage agreement is about R6.9-billion higher than what was budgeted in the February 2012 budget. We expect this to be funded largely from cuts in non-core areas of spending and the contingency reserve. An adjustment appropriation to seek parliamentary approval will be tabled in October.
"The government will take all the necessary steps to ensure that the increase can be accommodated with minimal impact on the fiscal path, infrastructure investment and service delivery."
Sisulu's spokesperson, Ndivhuwo Mabaya, refuted claims that Sisulu had committed funds from her department to supplement the wage bill. "It was not a decision by the minister. The mandate committee chaired by Sisulu and including 12 other minsters from various departments decided on the 7% increase.
"The department of public service and administration does not have funds to make up the shortfall. It's true that the salary comes into effect from May. It doesn't make mathematical sense for the department to make up the shortfall when it only has a R500-million budget allocated by the treasury.
"The mandate committee, including the minister of finance [Pravin Gordhan], took the decision to increase public service workers salaries by 7%.
"The committee met four times before they arrived at the 7% increase. Every time the government makes a move, the committee has to sit. So, no, it's not an individual minister that decides."