The government has failed to present ‘exhaustive evidence’ to show it cannot afford wage increases for its employees; lawyers for three COSATU affiliatedpublic-sector unions are arguing in papers before the Labour Appeal Court.
The South African Democratic Teachers’ Union (SADTU), the Democratic Nursing Association of South Africa (DENOSA) and the Police and Prison Civil Rights Union (POPCRU), as well as other unions, are engaged in a legal battle with the government to compel it to carry out the final phase of a three-year collective wage agreement.
The matter is set to be heard at the Labour Appeal Court on Wednesday, 2 December 2020.
In heads of argument, lawyers for the three unions state that the collective agreement, reached in January 2018 and concluded in May of that year, is binding.
At issue is the Agreement’s Clause 3.3, which refers to the salary increases for state employees for the financial year 2020/2021. Notably, clauses 3.1 and 3.2 dealing with the previous two financial years, are not in dispute. The implementation of the full wage deal would have cost the government an additional R30.2 billion (R6.2 billion for 2018/2019; R10.7bn for 2019/2020; R13.2bn for 2020/2021)
The lawyers agree that when the agreement was concluded in 2018 it was unforeseen that the government’s position might change for the worse as a result of COVID-19. ‘The government may not, however, seek to escape its obligations by relying on the change of circumstances.’
The government’s grounds for being unable to afford the increases are primarily a result of events that occurred after the collective agreement was concluded and are therefore irrelevant, they argue
‘The state was fully aware that it would have to lawfully find a source for the R30.2 billion and opted to conclude the collective agreement for self-serving reasons…’
They concede, however, that the government may ‘seek some relaxation regarding the time for compliance but not complete exoneration’.
In arguing that the collective agreement is binding, the lawyers point out that the state’s representative in the Public Service Co-ordinating Bargaining Council was authorised to conclude the agreement.
‘We submit that the submissions that the Department of Public Service and Administration exceeded its mandate when it concluded the agreement are untenable,’ they argue.
They ask how the government can argue that clause 3.3 is unlawful on the grounds that the collective agreement was concluded by a person other than the Minister of Public Service and Administration while still acknowledging that the two preceding clauses related to the 2018/2019 and 2019/2020 financial years are lawful.
In addition, the lawyers argued that the state’s reliance on regulations 78 and 79 of the Public Service Regulations to challenge the agreement is ‘misconceived’. Regulation 78 specifies the jurisdictional factors that must exist before a collective agreement is concluded while regulation 79 covers financial factors, such as when Treasury approval is required. The government is arguing that clause 3.3 has not been approved by the Treasury.
They argue that by virtue of the fact that the Minister of Finance is a member of the Cabinet and that the Cabinet approved the offer in January 2018, National Treasury had granted its approval. Constitutionally, they argue the Minister of Finance is not permitted to renege on a Cabinet decision.
They argue that the only reasonable inference to draw from the facts is that ‘Cabinet considered and complied with regulation 79 when it decided to present the January 2018 offer to the unions’.
They continue: ‘It is significant that when the state implemented the collective agreement over the two years no issue was raised regarding compliance with regulations 78 and 79.’
The lawyers allege that by attempting to have the agreement declared invalid, the state is violating its employees’ rights to fair labour practices, and their constitutional right to engage in collective bargaining.
They highlight a Constitutional Court finding that ‘the enforcement of these collective agreements is vital to industrial peace and it is indeed crucial to the achievement of fair labour practices which is constitutionally entrenched’.
The lawyers argue that the state’s counter application asking that the enforcement of the collective agreement be declared invalid is ill-founded and unsustainable. Firstly, the counter application was made two years after the collective agreement was signed, which the lawyers argue is not a reasonable timeframe. Secondly, the lawyers argue the collective agreement was concluded ‘in accordance with the applicable legal framework’.
Thirdly, the state’s attempt to renege on its obligation in terms of clause 3.3 ‘is an unjustifiable and unreasonable violation of the state employees’ constitutional rights to fair labour practices including the right to engage in collective bargaining and to have those agreements enforced’
Finally, ‘there was no tacit or implied term or agreement between the state and the unions that the agreement would be unenforceable in the event was unable to afford the salary increases or cost-cutting measures were not successfully implemented’.
‘We submit that permitting the state to withdraw from the collective agreement on the grounds that it is not affordable in light of events that occurred after the agreement was concluded would be against public policy. The sanctity of the contract has to be respected and upheld.’
The unions further argue that even if the agreement is found invalid, the court is obliged determine to ‘a just and equitable remedy’, stipulating that the government should be ordered to meet its obligations in a ‘staggered or phased-in manner’. This would validate the state employee’s constitutional right to bargain, they say.
ISSUED BY: SADTU Secretariat
General Secretary, Mugwena Maluleke: 082 783 2968
Deputy General Secretary, Nkosana Dolopi: 082 709 5651
Media Officer, Nomusa Cembi: 082 719 5157