How SA govt dodged an agreed pay deal

(First published on Fin24.com)

There is considerable anger throughout the labour movement at the ruling by the Constitutional Court, backing lower court decisions, that the government had the right to renege on the third year of a three-year pay deal with the public sector. When all the facts are taken into account, it is an anger — directed primarily at the government, not the courts — that is perfectly understandable.

Because what this decision clearly did, was to provide an illustration that the law and justice are often only distantly related; that the law, as Dickens noted, can be an ass. But, in this case, an ass manipulated by a government that is now perhaps more deeply distrusted than ever before, especially by public sector workers who continue to be portrayed in much of the media as greedy.

One of the myths regarding the public sector is that all workers are pampered and over paid. This nonsense continues to be propagated despjte the unions pointing out that the bulk of public servants are lowly paid; that top heavy management structures — including a grossly bloated cabinet — combined with corruption, probably creates the greatest drain on government spending.

Part of the Concourt judgement, taken out of context, has also now contributed to this jaundiced view of public sector workers. It noted that the unions were “unjustly enriched” by the 2018 wage deal; that the deal was an “impugned collective agreement”.

What this means, simply, is that the agreed pay rises were wrongly paid because the whole agreement was invalid from the start. In law, it was, but only because the employer — the government — apparently ignored its own departmental regulations and constitutional obligations. And this had nothing to do with the workers or their unions..

However, the agreement was reached and signed in a properly constituted bargaining council, by recognised union representatives and a government delegation headed by the minister of public service. It now appears that the government side was not legally competent to agree to the deal it argued for and signed.

As a result, there are accusations from within the labour movement that the government acted in bad faith from the start. This is a probably mistaken view: incompetence and a breakdown in inter-departmental and cabinet communication is much more likely to have been the cause. However, it is workers who suffer and, all too often, wrongly carry the blame.

In October 2017 the unions — in good faith — entered the disputed pay and conditions talks. These dragged on for nearly nine months, partly because the government demanded — apparently to allow for longer-term planning — a three-year deal while the unions wanted annual wage talks and adjustments.

The majority of unions eventually capitulated and, on June 22, 2018, the Treasury issued a statement outlining the three-year agreement, supposedly binding on both parties: government and workers, represented by the unions This was an example of collective bargaining, based on the principle — known in legalistic Latin as pacta sunt servanda — that mutual agreements should be honoured.

This principle is the cornerstone of collective bargaining and is supported by the International Labour Organisation where it is included in ILO conventions, to which South Africa is a signatory. In other words, as a country, South Africa acknowledges, in international labour forums, that honouring negotiated agreements is the right thing to do.

In this case, for two years, there was no sign that anything might be amiss as the deal was honoured. But, when third year payment fell due, government unilaterally reneged because it said it had no money.

As unions across the board immediately pointed out, it was neither they nor workers in the public and private sectors who made the policies and created the conditions for a debt trap, for wholesale corruption and the syphoning off of billions to a tiny elite.  South Africa’s economy, they noted, had grown and so too has the obscene wealth of the few at the expense of the many and money was available.

At the time, teacher unionist Basil Manuel commented: “It’s like someone buying a car on a three-year payment deal, paying for two years and then stopping payment while keeping the car.”

That the government then resorted to legal technicalities to avoid its contractual obligations has caused widespread resentment and a call to take the matter to the ILO. However, the issue tends to be seen more as government’s “incapacity to manage its own affairs” than anything more sinister.

For the unions, the matter is perfectly straightforward. Mugwena Maluleke, general secretary of the SA Democratic Teachers’ Union summed up labour’s view this week when he noted: “In common with most reasonable people, we believe that mutually agreed deals should be honoured.”

SA Federation of TradeUnions general secretary, Zwelinzima Vavi agreed and pointed out: “The whole basis of collective bargaining has been undermined.”