South African Public-Sector Unions Reject New State Wage Offer

Antony Sguazzin

(Bloomberg) --

Labor unions representing government workers in South Africa have rejected a revised wage offer and now plan litigation to enforce a previously agreed deal that the state has said it plans to renege on.

The government offered to increase the salaries of lower-paid workers by 4.4% while not giving a pay rise to the rest of the civil servants, said Reuben Mahlaka, a spokesman for the Public Servants Association.

While earlier this month the government had suggested no raise, the deal it had signed provides for inflation-beating wage increases.

“We are going for litigation,” said Mahlaka. The pay agreement was due to be implemented on April 15.

South Africa’s Treasury is severely constrained. Finance Minister Tito Mboweni last month proposed sweeping spending cuts to trim a fiscal deficit projected to widen to an almost three-decade high. Bailouts to rescue collapsing state companies have resulted in a surge in debt and put the nation’s last investment-grade rating in jeopardy.

“It was really deviating too much from the original agreement,” Mugwena Maluleke, the general secretary of the 264,000-member South African Democratic Teachers Union. “We are taking counsel now.”

(Adds fiscal position in fifth paragraph, union comment in sixth)

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