Sunday Times

Provinces have key role in wage negotiatio­ns

- By YOLISWA MAKHASI and DUMISANI HLOPHE ✼ Makhasi is director-general at the DPSA. Hlophe is acting deputy director-general

● 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.

 ?? ?? Noxolo Kiviet
Noxolo Kiviet

Newspapers in English

Newspapers from South Africa