Wage negotiations: Govt offers public servants increase, cash allowance

As a result of the facilitation process on the ongoing public service wage negotiations, the government has placed a revised offer to the trade unions for consideration by their members.

According to a statement issued by the Public Service Co-Ordinating Bargaining Council (PSCBC), the revised offer focuses on the bettering of the non-pensionable cash allowance of R978 that was previously offered and replacing it with a R1,000 minimum cash equivalent for all employees across all employment levels.

The latest offer excludes the assurance that employees will also receive at least a 1,5% salary increase on the baseline.

“This adjusted offer equates to level 1 employees receiving an amount equal to a cost of living adjustment of Consumer Price Index (CPI) + 7.5%, or a straight 11% increase if equated to the current salary levels.

Level 6 employees, for instance, will receive an amount equal to a cost of living adjustment of CPI + 2.1% while level 10 employees will receive an amount equal to CPI (4,2%).”

Draft Agreement

There is a wage negotiations draft agreement in place with a proposed implementation date of 01 April 2021.

“The draft agreement allows for a ‘safety clause’ that will bind the employer to continue to pay the cash allowance until such time it is amended by agreement between the parties,” added the PSCBC.

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Therefore, if no wage negotiations agreement is reached by 31 March 2022 on the 2022/2023 salary adjustment the cash allowance will continue to be paid to all employees.

Pension fund implications

In its statement, the PSCBC acknowledged that the cash allowance is non-pensionable before going on to explain that the Government Employees Pension Fund (GEPF) provides for an additional voluntary contribution scheme that would allow members to make additional contributions to their pension fund as a means to cover any possible shortfall.

“We also need to remind members that the GEPF is a defined contribution scheme and therefore your pension is not determined on your contributions throughout your career, but it is determined on a calculation of years of service and the salary scale and notch you are on at the date of retirement.”

The bargaining council noted that there would be employees that did not qualify for the adjustment.

“Unions have indicated that they will now take this wage negotiations offer to their members for mandating,” concluded the PSCBC.

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Compiled by Kaunda Selisho