Update on Public Service wage negotiations

Date: 6 Jun 2012


The negotiations on salaries and conditions of service for public servants commenced at the PSCBC on 16 February 2012. Although the State as employer was ready to table its offer in December 2011, labour requested the employer to afford it the opportunity to seek mandate from their principals. This consequently delayed the employer from tabling its offer.

Labour Demand

On 16 February 2012, labour demanded among others, the following:

  • Increase in the housing allowance from R800 per month to R1 650 per month;
  • A single term agreement; and
  • The conclusion of all outstanding matters as contained in Resolution of 1 of 2007.

Employer Offer

On 30 May 2012, after a series of protracted negotiations, which included a facilitation process by seasoned facilitators, the employer tabled a multi-year settlement offer of 6.5%, i.e.,

CPI plus 0.6% for 2012/13; CPI plus 0.5% in 2013/14 and CPI plus 0.5% for 2014/15.

In addition to the salary increments, on 1 July of every year satisfactory performers will receive a pay progression in accordance with the agreement signed at the PSCBC. This implies an additional 1.5% increase in the base pay (gross) of public service employees.

Furthermore, the State as employer proposed improvements on the following conditions of service;

Long Service will be recognised as follows:

  • 10 years continuous service: increase annual leave entitlement from 26 working days to 30 working days plus certificate;
  • 20 years continuous service: a cash award of R 7 500 plus a certificate;
  • 30 years continuous service: a cash award of R 15 000 plus a certificate; and
  • 40 years continuous service: a cash award of R 20 000 plus a certificate.

An increase of the Night Shift Allowance from:

  • R2,12 to R 2,69 per hour from 1 July 2012;
  • R2,69 to R3,35 per hour from 1 July 2013; and
  • R3,35 to R4,00 per hour from 1 July 2014.

Improved Qualifications

A once-off cash bonus of 5% of the employee's annual salary notch, limited to the minimum notch of salary level 8, will be paid to an employee in recognition of attaining an improved qualification.

Shop Steward Leave

An increase of leave for shop stewards of recognised employee organisations from 10 working days in a leave cycle to 15 working days with effect from 1 January 2015.

Family Responsibility Leave

  • Five (5) working days family responsibility leave in a leave cycle for utilisation if the employee's spouse or life partner gives birth to a child; or the employee's child, spouse or life partner is sick; and
  • Five (5) calendar days leave per annual leave cycle for utilisation if the employee's child, spouse or life partner dies; or an employee's immediate family member dies.

This implies an additional five (5) working days in the family responsibility leave category.

Pre Natal Leave

  • Eight (8) working days pre-natal leave to an eligible employee per pregnancy with effect from 1 January 2012 to attend medical examinations by a medical practitioner or midwife, as well as tests related to the pregnancy, without utilising sick leave days.
  • This will assist pregnant women in detecting complications in their pregnancy and provide an opportunity for early interventions and treatment.

Danger Allowance

The PSCBC will conduct an investigation to establish which additional occupational categories are exposed to risk, the nature and extent of the risk, the frequency of the risk and the impact on the safety of the employee with the aim to determine whether these categories should receive danger allowance.

The report resulting from this investigation will be tabled at the PSCBC.


Increase of the housing allowance from R800.00 to R900.00 per month with effect from 1 April 2012. At the introduction of the Government Employees Housing Scheme, the allowance will be converted into a subsidy towards a bond.

The implication of the employer offer

The employer, motivated by a desire to find an amicable solution in the interest of labour peace and stability in the economy, committed to improve its offer. This was done despite severe economic and fiscal constraints and the risk to worsen our credit rating (from positive to negative).

For example, the Budget Review of 2012 projected CPI for the 2012 Medium Term Expenditure Framework (MTEF) as follows:

  • 5.9% for 2012/13;
  • 5.3% for 2013/14; and
  • 4.9% for 2014/15.

Budget 2012 projects the wage bill to grow from R314.9 billion in 2011/12 FY to R378.1 billion in 2014/15 or R63.2 billion over the next three (3) years. An increase in the wage settlement offer will have a negative impact on these projections.

The wage bill as a percentage of GDP has increased from 9.4% in 2007 to 10.5% in 2011/12. The real GDP growth has decreased from 6% in 2007/8 to 2.8% in 2011/12. This implies that government cannot meet its priorities, like infrastructure spending, poverty alleviation initiatives without borrowing for recurring expenses, such as wages.

Unemployment remains relatively high, and the State has a responsibility to facilitate the reduction of unemployment and poverty.

In the 2012 State of the Nation Address the President announced the state's commitment to improve, among others, health and basic education infrastructure, information and communication technologies, and promote regional integration to promote future economic growth and development.

The State spends about 13.3% on goods and services, about 15.7% on transfers to households (social grants, etc.), about 4% on capital expenditure and about 33.5%, or one third (1/3) of the national budget on compensation of public service employees. In other words, public servants who constitute 2.6% of the total population of the country, consume the largest share of the national budget through salaries and benefits.

Any further increase in the Compensation Bill will require the following policy changes:

  • Increased taxes;
  • Reduction or freezing of employment;
  • Reduction of social grants;
  • Reduction in infrastructure delivery such as hospitals, roads, schools, universities and telecommunication networks;
  • Compromised economic growth and development; and
  • Higher borrowing (which must be serviced at a higher cost).


The State as the employer therefore believes that its offer is reasonable, and takes into account the economic and fiscal constraints faced by government. It strikes a balance between the needs of the public servants on the one hand, and the broader social and economic challenges of the State. It is in this context that the employer offer must be considered.

The employer wants to assure all public servants that it cares and appreciates their plight.

The next PSCBC meeting will take place on Thursday, 7 June 2012. The State as employer remains positive that a wage settlement will be reached.

Phephela Makgoke

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