Africa’s most industrialised nation is trying to rein in public sector salaries to arrest a rapid build-up in debt that has been exacerbated by the COVID-19 pandemic.
In the 2021 budget presented in February, the National Treasury said ways to curb the wage bill could include freezing salaries for the next three years, headcount reductions and changing or abolishing some benefits for civil servants.
Those proposals further strained relations with unions, after a court battle over the government’s failure to raise salaries last year.
The Public Servants Association (PSA) said in a statement on Saturday that it rejected a revised government offer made on Friday and would strike to secure salary increases for its more than 235,000 members.
Public sector unions affiliated with the COSATU federation, the country’s largest union grouping, said in a separate statement that a deadlock had been reached and they were consulting members over next steps.
A spokeswoman for the ministry negotiating on behalf of the government told Reuters its position had not changed since a Thursday statement saying there was no money for higher wages. She declined to elaborate.
At the start of negotiations in March, unions demanded wage increases of inflation plus 4% for all workers in the 2021/22 fiscal year, as well as better housing payments and a risk allowance because of COVID-19. Annual inflation is currently around 3%.
The government offered no salary increases during the first round of talks.
The PSA said the government’s tweaked offer on Friday proposed using “funds allocated for pay progression, resettlement costs, daily allowances, and encashment of leave to fund a cost-of-living adjustment,” which it called nothing more than “shifting funds”.
“The employer is hell-bent on a zero-increase approach,” COSATU said in its statement. Reporting by Alexander Winning and Wendell Roelf, Editing by Ros Russell