Samwu likely to reject facilitator’s wage proposal

The risk of local government workers going on strike increased as two unions involved in talks indicated that they would reject a proposal by an independent facilitator to cut wages in real terms and freeze other perks over the next three years.

“Early indication is that the majority of our members have rejected the proposal outright,” said Papikie Mohale, national spokesperson of the SA Municipal Workers Union (Samwu), referring to the recommendation by Naledi Burwana-Bisiwe.

Burwana-Bisiwe has been facilitating negotiations in the local government bargaining council, where parties agree on wage increases and other conditions of employment.

In her draft report, BurwanaBisiwe proposed a three-year wage deal, with employees getting 4% in the first year, followed by projected consumer price index (CPI) minus 1% for the second and third years. With the Reserve Bank expecting inflation to average 4.2% in 2021 and then to stay near the midpoint of the 3%-6% range the following two years, the proposal is more in line with the government’s objective and far from the stance of the unions, which are demanding as much as 9%.

The SA Local Government Association (Salga), which represents all municipalities in the country, has offered the unions a 2.8% wage increase.

In addition to souring relations between the ANC and unions in a local government election year, work stoppages threaten to further derail services across SA’s 257 municipalities, most of which are failing due to mismanagement and a lack of skills.

Often the burden of service provision has shifted through to private companies with branded food and beverages group Clover saying this month it would relocate the country’s biggest cheese factory from Lichtenburg in the North West due to poor service delivery from the Ditsobotla local municipality. Samwu is the biggest local government union, representing about 160,000 workers.

“We are still busy consulting, but are also running a parallel process of balloting members for a possible strike, as required by law,” Mohale said. If the unions rejected the proposal, they could go for conciliation “and decide whether they want to go for arbitration or strike”.

Independent Municipal & Allied Trade Union (Imatu) general secretary Johan Koen said Imatu members also look set to reject the proposals, though consultation was continuing, with a final meeting scheduled for June 21.

Salga spokesperson Sivuyile Mbambato said the association would give its reaction once it had received a mandate from its members. “Once the mandates have been received from all provinces, they will be consolidated accordingly to determine a way forward. We will indeed communicate our position at an appropriate time.”

After failing to reach a deal on a wage hike after four rounds of talks, the parties asked the facilitator to broker a deal acceptable to all parties. It was the first time they had agreed to embark on facilitated negotiations, something they hoped would promote better labour relations.

AFTER FAILING TO REACH A DEAL ON A WAGE HIKE, THE PARTIES ASKED THE FACILITATOR TO BROKER A DEAL

4 the rounds of talks between unions and Salga that failed to reach a deal

4% increase in the first year is what is proposed by the facilitator in her draft report, with increases below inflation in the next two years

Finance minister Tito Mboweni told an investment conference on Thursday that the Treasury would not back down on its insistence that any wage agreement for state workers must not breach the government’s fiscal ceiling.

He made the comments at a conference organised by the JSE and sponsored by Citibank and Absa Group, that was closed to the media, a person attending the event told Bloomberg, asking not to be identified.

Mboweni angered trade unions in 2020 by reneging on a prior deal to raise wages for 1.3million government workers. In February, he announced a new three-year pay freeze in the public sector as part of plans to rein in government spending, reduce the budget deficit and stabilise debt.

Unions, which are demanding increases of inflation, which averaged 3.3% in 2020, plus four percentage points, have threatened to strike.

Mboweni said he was not in favour of a basic-income grant and would prefer employment incentives, the person said.

Social development minister Lindiwe Zulu said in May that a basic income grant proposal would be taken to the cabinet later in 2021. Only 15-million people out of a working-age population of 39.5-million were formally employed in the first quarter in SA.

Mboweni’s spokesperson, Mashudu Masutha-Rammutle, declined to comment on the minister’s remarks, but said a recording would be shared with the media later. The JSE took the decision to lock out the media, she said. The JSE said it wanted investors to have frank conversations with ministers and therefore had decided not to invite the media.

Mboweni raised eyebrows in 2020 when he and senior Treasury officials addressed Goldman Sachs clients in a private call. Five days after the event Goldman put a recording of the call on its website.