Making Sense of Public Service Wage Negotiations

By Ebrahim-Khalil Hassen · 5 Jun 2012

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Picture: katerw/Flickr
Picture: katerw/Flickr

Wage negotiations in the public sector have reached an impasse. Unions have rejected a 6.5% wage increase offer from government, holding out for 8% and as well as a housing subsidy of R1500.

Commentary on the state of negotiations is focused on themes of fiscal sustainability and performance in the public service. The propaganda of both government and unions focuses on winning the proverbial hearts and minds of communities, should a dispute be declared.

Strikes seem a likely possibility given the history of public sector labour relations over the last decade. As we have seen this all before, it is tempting to shrug our collective shoulders and accept the status quo as a reality we must live with.

There are however two questions, which once answered, offer hope for swift and sustainable reforms in the public service.

The first question: Why has adversarial negotiations continued for over a decade?

The rise of militancy amongst public service workers can be traced to reform initiatives under the Thabo Mbeki administration. In the heat of the moment, the reform packages made common cause with a fiscal strategy that leftist groups justifiably criticised as a form of fiscal conservatism. More to the point, government not only mooted retrenchments, but also unilaterally implemented wage increases in the public service and in local government. Militancy was heightened as service delivery pressures increased in hospitals, schools and police stations with dedicated public service workers feeling let down by government as much needed supplies, equipment and additional staff failed to arrive.

With the benefit of hindsight, several proposals developed during the Mbeki era seem both feasible and necessary to transform the public service. Minister Geraldine Fraser-Moleketi made no friends with an abrasive style of engagement, but initiated several important reforms that needed to be bedded down to realise impacts. The most significant of these reforms was the introduction of the Senior Management Service. The idea being that managers in the public service are professionals, should have salary packages that are consistent with the private sector, but that performance and accountability measures should be put in place. The reform was a useful start, but as recent reports from the Public Service Commission show, many managers have not even completed the contracts on which their performance can be assessed.

Significantly, the inability to complete reform initiatives and to show success has led to a feeling  - evidenced in surveys – of a decline in the performance of government. In the context of salary negotiations, this has provided ample space for polarising voices to either argue that the “unions are blocking reforms” or that “neoliberal reforms are being undertaken”. In such a context, the cooler minds and patriotic hearts of leaders on both sides attempting to create a developmental state have been drowned out.

The context provides some of the answers, however, there have been tactical blunders on the side of government that could be described as basic, but with far reaching consequences. The 2009 salary agreement is a case in point.

Journalist Carol Paton at the time writing in the Financial Mail argued, “Public Service & Administration Minister, Richard Baloyi, has astounded cabinet and national treasury by signing a wage deal with public service unions that is not affordable for government and on which cabinet was not consulted.” In fact, the mandate of settlement in 2009 remains a vicious debate amongst government insiders.

Whatever the truth of the mandate is, government completely failed to coordinate the salary increases with sectoral work to introduce new pay scales for teachers, nurses and other public service workers– called Occupational Specific Dispensations. The unions may claim that they have outmanoeuvred government, but the reality is that government has lacked a coherent negotiations strategy.

The unions are buoyed by the outcomes of recent negotiations. There is however a recognition that the aim of “deepening the crises” to create space for a developmental public service has not been achieved.

In other sectors, this approach has proven extremely useful with a long and sustained strike followed by wide ranging and industry-changing agreements. Agreements reached in the mining, motor industry and clothing sectors are examples of these agreements. The core of the agreements is that they aim to sustain and create jobs, while improving productivity.

There is however evidence that union leadership in the public service, are recognising that despite a long strike in 2007 and sustained union activism, the breakthroughs to transform the public service have not yet arrived. The development of some proposals and partnerships with government to address this shortcoming suggests this.

The second question then is: How does South Africa build a capable public service?

Taking a broader public policy stance could yield a longer-term agreement on public service reform. There is broad agreement on many features of what such a reform framework would include. For instance, there is agreement on what Cosatu calls “employer of last resort” – meaning that in the context of high unemployment, government should be playing an activist role in providing employment, especially for young unemployed graduates.

Importantly, experts see a role for internships and paraprofessionals to bolster public service performance at institutional level. But Agreement on these issues as well as those related to performance and multi-year wage agreements can only be reached when set in the context of building a democratic developmental state.

There have been several attempts at seeking this wider agreement in the public service, with agreements produced in each of the public service summits. The agreements have, however, lacked implementation and have seen both unions and government unable to take the leaps of faith needed to transform the public service. The silver lining is that much of the work has already been done, and could prove foundational to reaching this wider agreement.

The presence of a long-term public service reform framework is needed because public policy questions cannot be resolved in a bargaining chamber. The classic example is government’s constant insistence on having a multi-year agreement linked to the budget cycle. It is obviously well within government’s rights to make such a proposal, but the reality is that unions would never agree to it in a bargaining chamber. The annual salary negotiations offer a tactical advantage to unions as they have a mobilised and militant membership and can extract gains -- as government is conscious of the political and social costs of another public service strike.

The missing ingredient is the “political work” needed to reach these wider societal agreements. A remarkable feature of the Zuma administration is that Minister Motsoaledi on National Health Insurance, and Minister Patel on the Infrastructure Investment Plan have both managed to craft broad consensus.

An equivalent agreement on public service reform would be foundational to meeting these goals. Such an agreement would be foundational to our society realising its goals.

There is literally no substitute for the public service in the poorest areas of our society. Any attempt to reduce poverty, inequality and increase employment requires a capable public service. The current state of public service labour relations diverts us from this task. In the end, when an agreement is reached, both government and union negotiators will report back on the tactical advantage the agreement provides. But neither the unions nor government negotiators can legitimately claim that they have contributed to building a developmental state. 

Hassen is the founder of Zapreneur and Proposal Desk, both websites aimed at answering the question, "Can the Internet help South African small business?"

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