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Collective bargaining mechanisms must be defended, entrenched and limitations, addressed through dialogue-Minister Dlodlo

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Speaking at the opening of the 4-day Public Service Summit at Emperors Palace, in Boksburg, on Monday, Minister for the Public Service and Administration, Ms Ayanda Dlodlo, said the collective bargaining mechanisms currently in place were a result of hard fought struggles that forms the bedrock of the democratic dispensation and must be defended, entrenched and where there are limitations, these addressed through dialogue.

The Minister said South Africa has made significant progress over the past 28 years to build a society that reflects the ambitions and values set out in the Constitution.

In 1994, South Africa saw the introduction of ambitious policy strategies, which were accompanied by a range of public sector legislative and policy reforms, intended to ensure that the policies established could be implemented.

She said these successive policies, saw South Africa move through key policy moments, from the Reconstruction and Development Programme (RDP), to the National Development Plan which now stands as the South Africa’s policy blueprint for long-term socio-economic development.

“To take this forward, equitable wage setting mechanism, understood and agreed upon by all partners, will ensure that wage settlements do not crowd out expenditure on other priority services.

“The single wage setting mechanism should apply across the public sector for purposes of eliminating unjustifiable disparities that lead to job-hopping, unnecessary competitions between spheres of government and state institutions.

“This mechanism should assist us to collectively implement reforms that will allow us, over time, to eliminate unjustifiable disparities in salaries and other conditions of service across the broader public sector,” she said.

The Minister said, “We need to recognise that government is also burdened with a massive wage bill that accounts for 33% of all wages paid in South Africa, while it only employs only around 13% of all workers.

“This clearly contributes to inequality and is, therefore unacceptable because over the last eleven financial years, the public sector wage bill grew at an average rate of 7.9% from R308.5 billion in 2010/11 to R659.8 billion in 2021/22.

“We therefore need a comprehensive and inclusive approach to ensure that the management of the wage bill is extended to public entities and local government as the funding pot remains the same. The fiscal risk to the fiscus and sovereign credit rating posed by SOEs and the local government requires that we improve the agility in which we engage with them.”

“Compensation spending on the consolidated budget accounts for about 12% of GDP, making it one of the highest in the world when compared to our peers.

“This is clearly unsustainable since the wage bill is growing faster than the revenue and budgets for wage adjustments come from the same source as funding for health, the police, roads and other Government priorities,” she said.

Minister Dlodlo said an equitable balance should therefore, be found to ensure sustainability and the maintenance of services at an acceptable level for South Africans.

She said researchers and economics have warned that failure to effectively link budgets, staffing levels, remuneration, and delivery priorities, would have consequences in the future for the social safety net, sustainability of public services and the stability of the country.

The summit takes place at a time that has seen growing distrust between government and labour and an uneasiness on the state of collective bargaining.

The Minister said the Constitutional Court judgement on the matter pertaining to clause 3.3 of PSCBC Resolution 1 of 2018 came at the back of this uneasiness.

She also announced that the Department of Public Service and Administration has commenced with a new Personnel Expenditure Review.

“The outcome of the Personnel Expenditure Review will inform the development of a new remuneration policy for the public sector and will specifically focus on problematic areas such as the occupation specific dispensations (OSDs) and consolidations of allowances,” she said.

The theme of the summit is “Strengthening and defending centralised collective bargaining to advance economic development, social justice, a capable and developmental state, labour peace and the democratisation of the workplace.”