Unions threaten national shutdown this week

[Nat Quinn]

The South African government is running out of time to meet demands from labour unions for a 10% wage hike, with the public sector facing a national shutdown this week.

Following a national strike last week (22 November), labour unions gave the national government seven days to meet their wage demands or face a national shutdown on Friday, 2 December.

The threats come amid a standoff between workers and the government over a 10% wage hike – which the government says it simply cannot afford.

The Department of Employment and Labour this month pushed through a unilateral 3% wage hike for all public sector workers, along with extending a R1,000 a month stipend for workers through to next year.

This increase, the government said, amounts to a 7.5% wage hike – something which the striking unions have rejected.

Four labour union federations – the PSA, Cosatu, Saftu and Fedusa – called out the government for “deliberately misleading the public” around the purported 7.5% wage offer.

“The employer is attempting to cause confusion between employees and members of the public by creating a perception that public servants are greedy to the point of rejecting a 7.5% wage offer, which is above CPI,” said the Public Servants Association (PSA) in a statement.

“This means that the government is making an extraordinary claim that a R1,000 stipend amounts to 4.5%, and combined with their current 3% offer, amounts to 7.5%,” the union said.

The unions added that, in reality, the offer remains at 3%, which is far below the CPI and was correctly rejected by most trade unions as mandated by their members.

Public servants still demand a 10% hike, which the government says it cannot afford – resulting in unions vowing to ensure a national shutdown with threats of an indefinite strike.

Ongoing hostilities between workers and the government over wages is a major point of contention for South Africa’s economic prospects.

On Friday (25 November), Fitch Ratings kept its rating of South Africa unchanged at BB- with a stable outlook.

However, the agency noted that it remained concerned about the standoff on public wages. It said the current public sector wage demands point to increased upward pressure on spending with the country struggling to get out of debt – which threatens the country’s debt servicing outlook if an increased wage is agreed to.

According to Fitch, the government’s debt stabilisation strategy relies heavily on restraining public sector payroll spending, but the on-going public sector strike illustrates that this may prove increasingly difficult.

“Some of the additional spending from higher wages will be absorbed by cuts in other areas, but deficits will still be affected,” it said.

If the unions stay true to their promise and strike on Friday, disruptions through go-slows or stay-aways are expected to occur at service centres such as public hospitals, ports and government institutions, e.g. home affairs and border control posts.

During the last two strikes and several pickets and stay-aways, public services were heavily disrupted. The strike action extended to essential services – particularly in the healthcare sector – which led to hospitals and patients suffering.

According to the unions’ deadline, the government has until Tuesday (29 November) to meet its demands.

 

Unions threaten national shutdown this week (businesstech.co.za)

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