South Africa’s government told labour unions representing about 1.3 million of its workers that it will scrap wage increases previously agreed to for the beginning of April, potentially triggering protests despite a ban on large gatherings.
Unions were given less than 24 hours notice ahead of the budget on February 26 of plans to cut pay increases to 1.5% from between 4.5% and 5.5% as the country struggles to get its debt under control. Since then, President Cyril Ramaphosa has declared a national state of disaster to cope with the shock from the coronavirus pandemic and its expected costs.
The government now plans to go beyond the proposal to reduce the increment and abandon the increase altogether. Unions are considering their legal options “as a priority” but they may take other steps, said Sizwe Pamla, spokesman for the Congress of South African Trade Unions, the country’s biggest labor group.
“It’s far from clear it is legal to take this course of action, but it will show some resolve on the fiscal crisis brewing in such challenging times, even if eventual success is going to only be partial,” said Peter Attard-Montalto, head of capital markets research at Intellidex.
Vukani Mbhele, spokesman for Public Service and Administration Minister Senzo Mchunu, said negotiations are still ongoing and he can’t comment until they are completed. Calls to officials at the Treasury weren’t answered.
While Ramaphosa on Sunday banned gatherings of more than 100 people to limit the spread of the disease, the unions could strike or embark on go-slows, said Pamla.
“If the workers want to strike, there is nothing the unions can do,” he said.
The National Education Health & Allied Workers Union, which has 280 000 members, wants to proceed with mass protests, despite Cosatu’s attempts to dissuade them, said Pamla.
“We plan a warning-shot march to Pretoria” if the wage agreement isn’t implemented, said Zola Saphetha, general secretary of Nehawu. “This is not something we are going to let go.”
He said that the union would see what protective measures could be employed if a march went ahead, such as workers standing several feet apart.
Mugwena Maluleke, the general secretary of the 264 000-member South African Democratic Teachers Union, said his union would follow the legal route as “the courts are capable of providing recourse.”
Reuben Mahlaka, a spokesman for the 240 000-member Public Servants Association, said the group will take legal action. The PSA is not affiliated to Cosatu.
© 2020 Bloomberg L.P.