JOHANNESBURG (Reuters) – Inflation-linked salary increases for civil servants during the coronavirus crisis would be unjust and unaffordable, government officials have told a South African court.
The officials were responding to a court case mounted by five trade unions which are trying to force the government to pay wage increases that were due to come into force in April as part of a three-year deal struck in 2018.
The government kept wages flat in April, the first month of the new fiscal year, citing economic pressures. According to the 2018 agreement, the government was due to pay a minimum of projected consumer inflation of 4.4%.
Public sector wages are a closely watched expenditure item for ratings agencies concerned about the country’s rising debt trajectory.
In an affidavit filed in the Labour Court on Friday, National Treasury Director-General Dondo Mogajane said paying the inflation-linked increases would plunge the government into additional debt of 37.8 billion rand ($2.26 billion).
The unions have argued that since the increases have been incorporated into their members’ employment contracts, they are entitled to them.
“Since public servants have been the beneficiaries of decades’ above-inflation salary increases outperforming private sector salaries, this (paying further increases) is not just and equitable. Least of all in circumstances where government is now compelled by the COVID-19 circumstances to expend additional funds to protect vulnerable people,” Mogajane said.
“This is not in solidarity with other workers in the rest of the country,” he added.
Senzo Mchunu, minister of public service and administration, said in a separate affidavit that the government faced “too many competing interests on our contracted resources”.
Mchunu said his ministry was exploring the possibility of a “one-off non-pensionable payment” instead of the wage increases, without disclosing the size of the potential payment.
(Reporting by Alexander Winning; Editing by Angus MacSwan)
