Negotiations on Salaries and Improvements in Conditions of Service: 2012/13 – 2014/15

1. Negotiations on Salaries and Improvements in Conditions of Service: 2012/13 – 2014/15 Presented by: Minister of Public Service and Administration

2. Contents_____________________________ • Background • Labour Demands • Employer Offer • The negotiations process • PSCBC Resolution 1 of 2012 • Implementation Plan • Financial Implications of the Resolution

3. Background_____________________________ • PSCBC Resolution 2 of 2011 committed parties to the PSCBC to negotiate a multi-year agreement. • Employer ready to table offer in Dec 2011 – labour requested opportunity to seek mandate. • Negotiations commenced on 16 Feb 2012.

4. Labour Demands_____________________________ On 16 Feb 2012 labour demanded: • A 10% across the board salary increase; • A single-term agreement; and • Finalisation of new and outstanding matters as contained in Resolution 2 of 2011: • Implementation of the following by the end of the 2012/13 financial year: • GEHS or an increase in the housing allowance from R800 to R1 650; • Long service recognition; • Night shift allowance; and • Recognition of improved qualifications.

5. Employer Offer_____________________________ • On 16 March 2012 the employer tabled a multi-year (package) offer in response to labour’s demands. Since then, there have been several rounds of negotiations resulting in sixteen (16) drafts of the agreement.

6. The negotiations process_____________________________ • On 13 June 2012, the State as Employer tabled and signed the following offer: • CPI plus 0.6% (6.5%) salary increase for 2012/12; • CPI plus 0.5% in 2013/14; and • CPI plus 0.5% for 2014/15. • In addition, the offer includes improvements on the following conditions of service: • Long service recognition; • Night shift allowance; • Family responsibility leave; • Pre-natal leave; • Shop steward leave; • Housing Allowance; and • Recognition of improved qualifications.

7. The negotiations process cont._____________________________ • Labour rejected the offer and subsequently, the PSA declared a dispute on the matter. • Parties met on 25 June 2012 to seek resolution to the wage impasse. • On 4 July 2012, after a long deliberation in the negotiations, in an attempt to induce a move towards a settlement figure, the State as Employer, proposed that labour seek a revised mandate from its members.

8. The negotiations process cont._____________________________ • The State as Employer requested Labour to seek a revised mandate based on the following terms: • A salary adjustment of CPI + 1% for FY2012/13; • A salary adjustment of CPI + 1% for FY2013/14; • A salary adjustment of CPI + 1% for FY2014/15; • A housing allowance of R900.00 per month effective on 1 April 2012; and • All other benefits as explained in previous updates to remain the same.

9. The negotiations process cont._____________________________ • Labour undertook to canvass this position with its members. • The State called on Labour to expedite this process so that the negotiations could be finalised. • On 10 July 2012, the employer requested that PSCBC convene to establish how far labour was with its mandating process. • Labour advised that it had not concluded the mandating process and agreed to go back and consult their members on the settlement proposal, including possible strike action. • On 11 July 2012, COSATU issued a statement that it is declaring a dispute, thus joining an already existing dispute which was declared by the ILC on 14 June 2012.

10. The negotiations process cont._____________________________ • Parties in the PSCBC met on 16 and 17 July 2012 to deliberate on the management of the dispute. On 17 July, parties agreed that the dispute proceedings be joined and that Advocate Bono conciliate the dispute. • The conciliation commenced on 20 July 2012 and a series of meetings were been held on 21, 25, 26, 27. On 28 July 2012 the conciliator declared that the parties were in agreement and the employer signed. •  On 31 July 2012, labour signed the agreement.

11. PSCBC Resolution 1 of 2012_____________________________ The agreement that parties signed can be summarised as follows: • A multi-year salary adjustment of: • 7% on 1 May 2012; • CPI plus 1% on 1 April 2013; and • CPI plus 1% on 1 April 2014. • Pay progression • The qualifying period for new appointments to the public service will be extended from 12 – 24 months.

12. PSCBC Resolution 1 of 2012 cont._____________________________ • Long Service Recognition: • From 10 years employees will qualify for 30 working days leave and a certificate; • 20 years: cash award of R 7 500 plus a certificate; • 30 years: cash award of R 15 000 plus a certificate; and • 40 years: a cash award of R 20 000 plus a certificate.

13. PSCBC Resolution 1 of 2012 cont._____________________________ • Night Shift Allowance will increase as follows • R2,12 to R 2,69 per hour from 1 July 2012; • R2,69 to R 3,35 per hour from 1 July 2013; and • R3,35 to R 4,00 per hour from 1 July 2014. • Housing allowance • The allowance will be increased from R800-00 to R900-00 per month with effect from 1 April 2012. • The process to develop the Government Employees Housing Scheme continues.

14. PSCBC Resolution 1 of 2012 cont._____________________________ Recognition of improved qualifications • Upon attainment of one qualification that is related to an employee’s scope of work and enhances the employee’s performance and the service delivered by the employee, the employee will receive a once-off cash bonus of 10% of his/her annual salary notch, provided this does not exceed the minimum notch of salary level 8. • This does not apply to qualifications paid for by the State.

15. PSCBC Resolution 1 of 2012 cont._____________________________ Leave • The following leave provisions are applicable in a leave cycle. With effect from 1 January 2013, employees will receive: • 5 working days family responsibility leave for births and illness; • 5 working days family responsibility leave for deaths; • 5 working days pre-natal leave for medical examinations; and • 15 working days for shop stewards leave.

16. PSCBC Resolution 1 of 2012 cont._____________________________ Amendments to PSCBC Resolution 3 of 2009 • According to Resolution 3 of 2009, all employees appointed as Assistant Directors and Deputy Directors, shall with effect from 1 July 2010, be on salary levels 9 and 11 respectively. • Appointments on levels 10 and 12 will be re-introduced.

17. PSCBC Resolution 1 of 2012 cont._____________________________ The parties to the PSCBC are tasked with investigating and developing proposals on the following aspects: • Outsourcing; • Occupational Health and Safety; • Decent work; • PMDS; • Re-arrangement of working time; • Danger allowance; • Minimum Service Level Agreement; • Government Employees Housing Scheme; and • Remuneration Policy.

18. Implementation Plan_____________________________ • The DPSA will conduct workshops to present the agreement and to explain its implications to Labour Relations and Human Resource Management practitioners in the public service. • The DPSA is finalising the development of policies emanating from the agreement and thereafter will commence with the implementation of the agreement as per thee implementation plan. • Departments will require additional funding to implement the adjustments over the MTEF period.

19. Financial Implications of the Resolution__________________________________ • The baseline will grow by R17.1 billion in FY 2012/13 (11 months); • By R18.1 billion in FY 2013/14; and • By R17.6 billion in FY 2014/15. • This excludes policy matters not affected by the Cost of Living Adjustment, such as, among others, Housing Allowance, Night Shift Allowance and Long Service Recognition which will cost R1.7 billion over the MTEF.

20. THANK YOU