South African Pay Dispute With Workers Resolvable, Nene Says

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A pay dispute between South Africa’s government and unions representing most of the state’s 1.3 million civil servants is due to a misunderstanding and can be resolved without a strike, Finance Minister Nhlanhla Nene said.

Unions on Thursday withdrew from an accord struck last month that provides for a 7 percent increase in salaries from April 1 this year after government departments were told to raise them by 6.4 percent. State officials said the lower payment was justified because the consumer price index gained less than forecast in the year that ended March 31, meaning workers had been overpaid under a previous three-year pay deal.

“I think we will find each other,” Nene said Friday in an interview in Johannesburg. “All the agreements we had in the past were based on CPI projections. At the end of the year, every time they would take into account the actual inflation and government had always made up for the difference. The only difference this time, is that this is the only time inflation has come in lower.”

The unions accused the government of back-tracking on the pay accord that was agreed to on May 19 and said they will resubmit their wage demands.

“We were deliberately misled,” Basil Manuel, president of the National Professional Teachers Organization of South Africa, told reporters in Pretoria, the capital. “Our mandate has always been 7 percent. We want to resolve this amicably. We will exhaust everything else that is possible before we embark on a strike.”

Wage Bill

The Feb. 25 budget provided for the wage bill to rise by an average 6.6 percent in each of the three years through March 2018.

“The extra amount that government has got to add for the wage bill is around 12 billion rand ($966 million) this year, 17 billion rand next year and then 31 billion rand in the outer year,” Lungisa Fuzile, the director-general of the National Treasury, said in an interview in Johannesburg.

The 2012 wage deal didn’t require negotiation around the inflation adjustment and the government won’t back down, said Fuzile.

“We are implementing 6.4 percent, I’m telling you,” he said. “We are not working on any other number.”

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