South African unions agree to public sector wage deal, says minister

PUBLISHED: Tue, 27 Jul 2021 12:09:01 GMT
Wendell Roelf
Reuters
Share
Minister Senzo Mchunu announces newly elected Chairperson and Deputy Chairperson of South African APRM National Governing Council
Minister Senzo Mchunu briefs media on the announcement of the newly elected Chairperson and Deputy Chairperson of South African APRM National Governing Council. [Photo: GCIS]

CAPE TOWN, July 27 (Reuters) – The majority of public sector unions in South Africa have signed a one-year wage hike deal, a cabinet minister said on Tuesday, as government looks to cut a huge spending bill and boost economic prospects worsened by the COVID-19 pandemic.

When talks started in March, public sector unions representing more than 1 million teachers, police and nurses, wanted a salary hike of consumer inflation plus 4% for all workers in the 2021/22 fiscal year.

Government offered zero increase at the outset, but changed tack during a conciliation process after parties deadlocked and labour threatened strike action.

In July, Public Service and Administration Minister Senzo Mchunu offered civil servants a 1.5% salary increase plus a cash payment, which the majority of unions, including the South African Democratic Teachers Union and the Public Servants Association, accepted on Monday.

Read more: African Union Commission’s new Chairperson is from Chad

“Thank you for your leadership, thank you for negotiating with the interests of public servants and the citizens at heart,” Mchunu said in a statement welcoming the deal.

The government is trying to contain its wage bill, which accounts for about a third of consolidated spending and which has risen quickly in the past decade.

The huge wage bill has been flagged among major concerns for credit-rating agencies that already rate the sovereign as “junk”.

(Reporting by Wendell Roelf; Editing by Edmund Blair)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.