Treasury will fork out provincial deficit if unions win wage dispute, says Western Cape govt

The commitment by government comes amid a longstanding dispute with public sector employees.  

Public sector unions, including the National Education, Health and Allied Workers Union (Nehawu) and the Public Servants Association (PSA), are demanding that government honours its three-year wage agreement of 8%. 

The dispute may now play out at the Constitutional Court after eight unions applied for leave to appeal an earlier Labour Court judgment relating to the wage increases. 

Should the apex court rule in their favour, government would have to pay a hefty bill. 

MEC for Finance and Economic Opportunities in the Western Cape David Maynier wants government’s assurance that provinces would not bare the brunt of the agreement.

“We have received a letter from President Cyril Ramaphosa, which includes confirmation from the Minister of Finance Tito Mboweni, that if national government lose the appeal by the public sector unions, currently before the Constitutional Court, and the public sector wage agreement is implemented they will cover the increase in the cost of compensation of employees in provinces. 

“We now have the clear commitment that we asked for, that should the public sector unions win their appeal on the wage agreement, funding will be provided by National Treasury,” says Maynier. 

“This is a huge victory for provinces because it mitigates a significant fiscal risk which was transferred to provinces by national government.”  

Meanwhile, government is still looking to slash the public spending by a significant amount.  

Treasury’s Budget Speech is also coming up later in the month, where Finance Minister Tito Mboweni is expected to lay out plans to boost government’s empty coffers.  

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