Provinces have key role in wage negotiations
● The article “Government’s reckless public sector wage deal passes the buck to provinces” (November 12), by Western Cape MEC of finance & economic opportunities Mireille Wenger, presents us with an opportunity to clarify aspects of wage negotiation agreement between the state and organised labour.
The first is the assumption that “provinces have no role in the wage negotiations”. The process of wage negotiations in the public service is an intergovernmental one. One of the structures is the executive consultative committee, which comprises various ministers and provincial premiers. This committee considers recommendations from the technical negotiating team that includes officials from the department of public service & administration (DPSA) and the National Treasury. This committee reflects and advises the committee of ministers on the provincial and national implications of the substance of negotiations. It provides executive oversight over the negotiation process. In this regard, provinces are an essential part of negotiations.
According to the MEC, the latest wage agreement is a “blatant, reckless appeasement of organised labour in the public service” by the national government. Wage negotiations between the government and organised labour are intense. They begin with the Treasury presenting the government’s analysis of the domestic and international economic outlook, and what is available within the national budget. Similarly, organised labour presents its own reflections and analysis of the domestic and international outlook. These inform the basis on which the wage negotiations unfold. To align wage negotiation outcomes with the available budget, the process is linked to the government planning and budgeting cycle.
The government is not powerless in negotiations with organised labour. However, it recognises the critical role that organised labour plays in the public service. It recognises the importance of collective bargaining processes and systems within the set democratic forums, such as the Public Service Co-ordinating Bargaining Council. There have been instances where agreements were not reached, and the government maintained its position guided by the quest to sustain a healthy national fiscus. However, the value of negotiations remains sacrosanct, and the government will not negotiate in bad faith.
It is true that the finance minister emphasises the necessity for substantial trade-offs in government expenditure in the near and medium terms, given that the wage bill is a prominent cost factor.
To this effect, public service & administration minister Noxolo Kiviet has released a directive outlining control measures to contribute to fiscal sustainability through recruitment at national and provincial departments.
Financing of public services is governed by the government’s fiscal policy and budget framework. These approaches seek to maintain a sustainable balance between spending and borrowing, keeping consumption at an affordable level and ensuring that salary increases are fiscally sustainable. The cabinet has maintained that the management of cost-effective measures should not compromise service delivery and the attainment of developmental goals.
The DPSA directive does address the issues raised by the MEC on departments such as health and education. Other institutions in this regard include correctional services and the police. There are posts in these sectors classified under the occupation specific dispensation category which are exempt from the impact of this control measure. Fundamentally, posts associated with institutions classified as essential services may be advertised and filled without adhering to the requirements outlined in the directive. This ensures the uninterrupted provision of essential services.
It is important to distinguish “control measures” from “government imposition of a moratorium on the filling of posts”. While departments retain the authority to create and fill posts, they prioritise on the long-term viability of such posts. That is, it is essential for national and provincial departments to demonstrate the importance of such appointments in relation to the intended developmental outcome. So the directive does not prevent departments from filling posts but puts measures in place to ensure that only critical posts are filled.
The DPSA, working with the Treasury in consultation with national and provincial departments, state agencies and state-owned agencies, has undertaken an extensive review of the personnel expenditure within the public service. This seeks to develop a remuneration regime that will ensure the government gets value for the money it pays in salaries and benefits, while guaranteeing appropriate delivery of public goods and services.
The government faces an intricate balancing act: on one hand, it must address the increasing cost of living of public sector employees and all citizens; on the other, it must sustain a healthy fiscus and fund development and service delivery programmes and projects. This makes the government a contested institution in terms of resource allocation. Thus, negotiations, engagements and social compacts are essential for the country’s prosperity.
Perhaps what should be avoided is the narrative that reduces the public service wage bill to the total cause of the national fiscal challenge. Doing so will rob South Africa of finding fiscal solutions in the various sectors of society.