/ 6 September 2010

Unions ‘suspend’ public-sector strike

South African public sector workers suspended a pay strike on Monday as it entered its fourth week, union officials said.

The strike by 1,3-million workers has affected education, healthcare and the judiciary. Strikers have demanded a double inflation 8,6% pay rise and a R1 000 a month housing allowance.

“Labour has decided to suspend the strike and this does not mean we have accepted the state offer,” 19 unions representing the state workers said in a joint statement.

The unions said they had 21 days to finalise discussions with their members on a draft agreement.

President Jacob Zuma’s government raised its offer to 7,5% and R800 for the housing allowance last week but workers rejected the deal and unions asked for more time to explain the offer to their members.

Government officials said the state could not afford the offer they had already put on the table and there was no more room in the budget to increase the offer, which would swell state spending by about 1%.

The biggest strike since 2007 in terms of lost man days has left bonds, stocks and the rand largely unaffected, but market players said the strike would cap gains by the rand and could have a bigger impact if it drags on.

Economists predict that the labour action is costing the economy about R1-billion a day.

‘Welcome development
Public Administration Minister Richard Baloyi welcomed the news.

“The return to work is a welcome development for the public service and the country in general,” said Baloyi in a statement.

“We urge those who are returning to the workplace to ensure that we deliver the services that are so sorely needed by all communities across our country.”

Political parties also weighed in with their reaction to the news of the strike suspension.

“We believe this is a step in the right direction in ensuring stability and normality in our public sector offerings, particular[ly] around education and health services,” ANC spokesperson Jackson Mthembu said in a statement.

The Democratic Alliance (DA) criticised the increased pay offer and the strike itself.

“In playing for time to serve their own political agenda, the unions have demonstrated a serious misunderstanding of the far-reaching economic consequences of this strike,” said DA chief whip Ian Davidson in a statement.

He called the government budget “over-burdened and over-extended” and said the increased wages would result in cuts to services.

“The increased government wage bill effectively means government has fewer funds to hire more people and roll out crucial services to the greater populace,” said Davidson. – Reuters, Sapa