Civil servants offered 1.5% pay rise

Source: www.pixabay.com

Unions previously said the negotiations had reached a deadlock, after the government initially offered no increase.

The government is trying to contain its wage bill, which accounts for around a third of consolidated spending, to rein in a steep rise in debt that has been exacerbated by the Covid-19 pandemic.

"The offer is 1.5% which is pensionable and is on the baseline," Mchunu told a news conference. "Secondly, there is a cash gratuity which ranges from R1,220 to R1,695."

The unions had yet to respond to the offer. Mchunu said the government and unions would meet to discuss it on Tuesday.

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Potential strike

Angered by the state's initial refusal to raise wages, one of the biggest public sector unions, the Public Servants Association (PSA), has balloted its members about a potential strike.

Other unions affiliated with the Cosatu federation that is closely aligned with the governing African National Congress have taken a more conciliatory approach, pursuing talks with the government in a bargaining chamber.

At the start of the negotiations in March, unions demanded a wage increase of inflation plus 4% in the 2021/22 fiscal year, as well as better housing payments and a risk allowance because of Covid-19.

Annual inflation was 5.2% in May.

Restraining rising wages is one of the key pillars of the National Treasury's fiscal consolidation strategy. Last year the government won a court case over wage increases that it refused to pay.

The PSA has challenged that ruling in a higher court.