Strike: the three big hurdles still to be negotiated

Talks in the public service will continue in the shadow of the strike on the basis of a working document adopted by the bargaining council on Wednesday.

Earlier this week, a joint technical team developed the document, which outlines areas of agreement and disagreement. The proposals are not concrete offers or demands because they were not mandated.

Negotiators will use the proposals to report back to members and seek new mandates. Public Service and Administration Minister Geraldine Fraser-Moleketi told Parliament on Wednesday that the document would hopefully remove the ‘need for any industrial action”, yet union leaders were adamant that the strike will take place on June 1.

The strike follows several rounds of talks that began in November last year. Negotiators for the unions said that percentage wage increase, pay progression and the occupational dispensation formed a triangle of issues that were key to resolving the strike. Government negotiators added that discussions about medical aid contributions were a further sticking point.

One proposal on salary adjustments contained in the new working document is a 6,5% wage increase in the first year and another is a 9% increase.

The government’s offer rose from 5,3% during negotiations to 6% in the first year and the consumer price index excluding mortgages (CPIX) plus varying percentages in following years. Labour Research Service director Sahra Ryklief said the unions’ demand for 12% was reasonable in the context of double-digit food inflation last year and high transport inflation, which was especially significant for lower-wage earners.

The working document proposes that the agreement regarding salaries last for two years long and the rest of the agreement be four years long. The government has been proposing a four-year agreement, which would see it past the 2010 World Cup, while the unions have been pushing for a yearlong agreement. Past agreements in the public service have tended to have a duration of one to three years.

The unions have argued that public service salaries have not increased in real terms over the past decade and that salary hikes have consistently lagged behind the private sector.

Fraser-Moleketi has said that the union’s 12% wage increase demand would increase the wage bill by R15-billion.

The working document suggests that the government reduce the current 16 notches between each salary level to eight notches. It also suggests that salaries increase by 2% with each notch instead of the current 1% increase.

This proposal reflects labour’s demand and would only apply to employees who are not covered by dispensations specific to their job category. The unions also demand that the state raise the minimum wage in the public sector from an annual salary of R35 916 to R46 200, effectively cutting out the two lowest levels.

The government argues that the reduction in the number of notches and a 2% notch increase would cost the state a total of R171-billion. The government’s chief negotiator Kenny Govender explained that this calculation took into consideration the cost of bumping all civil servants up by two salary scales.

The proposal under discussion sets different dates for certain occupations to be re-graded in terms of ‘occupation-specific dispensations”, meaning that their salaries would no longer be locked into the current public service pay scale.

For example, this year, the state would introduce dispensations for nurses, principals and legal professionals in the justice cluster. The next year, it would devise dispensations for medical specialists, school-based educators and social workers.

The council would also agree upon which occupational categories would come under review in the subsequent years of the settlement’s duration.

The government is introducing occupation-specific dispensations as a measure to attract and retain skills in the public sector, Fraser-Moleketi said in a press statement in May. In some cases, the salaries will be aligned to market benchmarks.

Moreover, the government may increase salary bands to allow employees to remain within production levels and not move into managerial posts, Fraser-Moleketi added. Under this system, for example, a teacher could remain in the classroom for longer and receive pay increases without having to become a principal or more senior worker.

Some analysts have said that the unions agreed with government to introduce career paths in 2001, but a party close to the negotiations said that education was the only department to make progress since then.

Nehawu general secretary Fikile Majola said the idea of occupation-specific dispensations was not bad, but could represent a ‘piecemeal” approach to restructuring the public service. He said that it was critical to agree upon a comprehensive proposal that set out a clear policy, strategy and mechanism for the process over the next three years so that it did not result in ‘divide and rule”.

Among other issues being negotiated are allowances.

The working document suggests that the government increase subsidies only for workers in the government employees’ medical scheme (Gems) to R2 020 and give an additional amount for each principal and up to three dependents.

The union has demanded that the government give the current medical scheme subsidy of R1 900 to all public servants, including those not in Gems. The government has offered to raise the subsidy to R2 020 for employees in Gems only, which Govender said would cost the state R150-million. The unions’ demands would cost R3,5-billion, he added.

Before Gems was introduced last year, the government paid two-thirds of a medical aid subscription to a maximum of R1 014. An audit before the introduction of Gems showed that there were 450 000 people on medical aid, according to Govender, who added that about 130 000 people have since moved onto Gems.

He explained that the government believed that a single medical scheme was in the interest of government employees who would benefit from economies of scale and the ability to determine how the benefits are structured. Some unions affiliated to trade union federation Cosatu have stated their support for a single state medical scheme but, say they want to further discuss the structure.

The working document also suggests that government increase the monthly housing allowance to R456, which one union leader has described as a ‘substantial improvement”.

The unions have been demanding that the government’s housing contribution be based on a bond value of R300 000 and not R70 000. The working document proposes that the council undertake a review of housing allowances as the basis for a future decision to address these concerns.

Fraser-Moleketi has said the unions’ housing demands will cost R9,5-billion. The government has been moving away from housing contributions based on bonds, arguing that a monthly allowance is more equitable. Govender explained that not all public servants could afford bonds or lived in areas where they could get bonds.

In 2004, the government accepted the principle of equity and began to pay a fixed allowance, said Govender. The government planned to phase in the allowance, which would reach R456 by 2009.

The 330 000 public servants who had previously benefited from the contribution towards their bond continued to receive that support while another 300 000 benefited from the allowance, said Govender.

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