Wednesday, August 17, 2022

JUST IN | Govt workers lose Constitutional Court bid to enforce wage agreement

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The Constitutional Court has ruled against public sector trade unions in their bid to force government to honour a wage agreement for 2020, siding with the Labour Appeal Court which found that the agreement was unlawful. 

At stake was R75.6 billion in backpay, which unions had hoped the court would order must be paid as well as a higher salary baseline going forward.

For Treasury and Finance Minister Enoch Godongwana the ruling will come as a relief. Had the court ruled against government, the budget framework – tabled only last week – would have been thrown into disarray with an obligation on government to both pay backpay for two years and raise the wage bill for the next three years by a baseline of R37.8 billion.

The Constitutional Court found that as the wage increase had not been budgeted for and Treasury had indicated this to the state’s representatives during the bargaining process, the agreement was unlawful. 

The outcome means that public servants’ wages have been frozen for two years. In 2021, they received a R1 000 a month cash gratuity as a sweetener. But this amount has not been included in pensionable salaries.

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