Statement by the Minister for the Public Service and Administration in the National Assembly on wage negotiations

Madam Speaker

Thank you for affording me the opportunity to make a statement on the current wage negotiations.

Let me start by taking us back to 1994 when we first gathered in this House as representatives of a democratic dispensation. One of our first tasks was to forge a public service able to serve the needs of a democracy � a democracy facing the challenges of serving a widely disparate society, with extreme inequity � where services had been offered to the privileged few and denied to the disadvantaged majority.

The challenge was not only to provide services within an established structure, but was far more complex � the public service was faced with the challenge of acting as agents of change and transformation, while being transformed and reformed itself - a challenge and obligation that we were later to codify in our Constitution, which, in Chapter 10 speaks of the values that must underlie, and mandates the developmental role which must characterise our public service.

Thirteen years later the challenge of building a public service that has the capability to deliver to the needs of the developmental state is still with us � as we strive to consolidate the transformation and build on the considerable advances we have made since we embarked on our transformation project.

You may wonder what this has to do with the topic at hand. In one word, everything. The conditions of service for our cadre of public servants are central to the building of a skilled, dedicated and innovative public service. This must be our starting point when we consider the conditions of service for our public servants. Public servants must be properly rewarded for their labour, their skills, their performance and their dedication. We must have the framework in place to attract and retain the best and brightest of our labour pool. Our public servants must work in conditions that are conducive to good performance - receiving payment that recognises their worth in line with market conditions. And with opportunities for advancement and career development.

The general welfare of public servants is a prime consideration. As employer we have the responsibility to ensure that these benefits in areas such as pension provision and healthcare are available to ensure a healthy workforce and retirement free of insecurity. We must be vigilant that these provisions are not eroded though short term expediency, such as higher salaries at the expense of longer term security and broader conditions of service. Those who labour under particular conditions, such as on weekends or at night must receive proper compensation for the toll this takes on their personal lives.

The state must balance what it spends on wages and benefits with what it spends on the goods and services it provides to the populace. This is particularly important considering that the developmental character of our state requires that we consider the longer term implication of this expenditure on the lives of the disadvantaged and needy, as we seek to fulfil their justified aspirations to a better life.

Our offer seeks to ensure that the buying power of public servants is not eroded through inflation � that the general wellbeing of public servants is addressed through provision of appropriate medical aid and housing allowances � and that in certain special categories non-pensionable allowances are adjusted.

In addition we put on the table a new dispensation for professionals and specialists in order to ensure that we are able to attract people with these skills to the public service and ensure that their careers are developed within the service in order that we retain them.

Madam Speaker

Much is made of the low levels of pay of public servants, but it is important to note, that between 1997 and 2006, employees on salary levels 1-8 received a real increase, over and above inflation. Level one � unskilled general workers- received a real increase - after inflation is taken into account) � of 13,3 percent. We do however recognise, that levels 9 to 12 � which includes those in the professional categories - received a below inflation increase over this period and it is this that we want to address. Since 2002 there has been a real increase (above inflation) at the higher levels, but we want to move forward much more dramatically with a proposed new structure.

I will not go into lots of numbers but I would just like to point out some detail of the earnings of our public officials. The lowest level worker in the public service currently earns R35 916 per annum. Including the macro benefits (medical, pensions, service bonus and housing) the total package of on this level would be R71 850. The macro benefits therefore constitute more than 50% of the package. With a hypothetical 6% salary adjustment, the minimum salary will be R38 070 and the total package will be R75 940. I leave you to draw your own conclusions, bearing in mind that this is the salary that a general worker, for instance a cleaner, earns in the public service.

To give further detail with regard to the new salary structure our key focus over the next few years will be to develop and implement occupation specific dispensations with the aim to improve the Public Service's ability to attract and retain skilled employees.

The biggest challenge encountered in the Public Service is to adequately remunerate the diverse categories of employees by means of a single salary scale. This is further aggravated by the current lack of appropriate progression and promotion opportunities in certain occupations. It is therefore accepted that in a number of occupations salaries are generally not competitive for the more skilled and experienced employees.

To address these challenges, the introduction of the occupation specific dispensations will be developed and implemented for identified occupational categories. This will entail introducing unique salary structures per occupation, including grading structures and job profiles, as well as progression and career pathing opportunities based on competencies, experience and performance.

Madam Speaker,

The House is well aware that Labour originally tabled demands which were impossible for the state to meet. They would have added R200 billion to the wage bill in the first year of implementation, more than doubling the current wage bill. Clearly we were a long way apart.

The House is also aware that over the last two days, at the request of the employer, the parties reconvened to discuss a way forward. The purpose of this meeting was to find a way of coming together and to this end a technical working group with representatives from each side sat through Monday night and came back with a working document. Discussions around this continued yesterday, and I am happy to announce that in the last few minutes moment council is convening to discuss this as a working document and as an official document on the table in the bargaining chamber. This is a major breakthrough, and while much work still needs to be done, we can now start charting our way forward.

The objectives of this document are:

* to provide a basis for the general salary adjustments for employees for the forthcoming years
* to introduce revised salary structures for specific occupations in the professional area, catering for career pathing, pay progression, grade progression, seniority, increased competencies and performance, with a view to attracting and retaining professionals and specialists. This covers educators, health professionals, legal professionals amongst others and will ultimately reach 80% of the public service
* to replace the existing Scarce Skills Framework for the public service with the introduction of the revised salary structures
* to review the non-pensionable allowances
* to deal with certain leave matters
* to provide for the adjustment of the medical aid subsidy
* to provide for the alignment of the public service with the requirements of the Basic Conditions of Employment Act 1997
* to provide for processes to review certain existing terms and conditions of employment.

Labour has agreed to consider this proposal in its entirety, while negotiating certain aspects within the proposal. Agreement has been reached on the larger part of this proposal, with exceptions amongst others being the level of the salary increase, the conditions relating to medical aid and pay progression for those who will remain outside the new pay framework for professionals and other specialists. We consider this a major advance. We have collectively moved from a deadlock situation, to one in which we are able to negotiate on the future nature of the public service.

Madam Speaker,

I would like to use my remaining time to give a little detail to our proposal for the occupation specific salary structures, developed to attract and retain certain employees. This structure will enable us to address the current 'one size fits all' approach which we use to remunerate a wide range of occupation categories. Much is made of the poor conditions under which such professionals � for example educators and nurses � work and we recognise the need for their salaries to be revised. This system will recognise the unique skills and experience of such categories. It will offer a unique salary structure per occupation with centrally determined grading structures and broad job profiles.

No longer will professionals reach a plateau early on in their careers � often the cause of their departing from their chosen occupation or from public service � but they will now have career pathing opportunities based on competencies, experience and performance. The system will cater for pay progression within the salary level and certain current benefits and allowances will be incorporated into their salaries. We will, where appropriate, align salaries to the market, enhancing the public service as an employer of choice.

We are proposing to implement the new structure for nurses with effect from 1 July 2007. Certain categories of nurses with ten years or longer experience stand to earn a very significant increase in the area of 50 percent. Legal professionals within the justice cluster will become eligible from July 2007, educators will be included from 1 January 2008 and social workers engineers and architects from July 2008, followed by correctional officials, environmentalists and other identified professionals in July 2009.

Other professionals in these sectors are also catered for, and the detail is available.

The negotiations related to each of these occupations will be dealt with at the relevant sectoral bargaining council, but these professionals can rest assured that they will see very significant increases. These negotiations are not only about a percentage increase, but about a change in the nature of the Public Service, where those who work hard and have skills and experience will be recognised and rewarded.

Provisions for the roll out of the housing allowance are also on the table and represent very significant assistance particularly to the lower levels of workers. We also agree to undertake a comprehensive review of the current housing allowance and undertake to complete this and negotiate the recommendations by July 2008.

The employer also recognises the need to reward improvement in qualifications that are job related and will enhance performance and service delivery � as well as the need to revise the existing long service award, in order to retain skills and reward loyalty.

Madam Speaker

While these provisions often pale against the heat generated by the debate on percentages, it is these benefits that make an organisation an employer of choice.

It was that great revolutionary, leader and thinker V I Lenin, who coined the term 'Economism' to describe certain groupings in the terrain of social change, who sought to reduce the needs of the workers to the mere monetary, ignoring the long term needs and aspirations of those who toil for their salary.

"If the economic struggle is taken as something complete in itself, he wrote, there will be nothing socialist in it."

I am happy that we have moved from such positioning in our negotiations and that we can now face the challenge of shaping our public service so that it is both able to cater for the needs of its employees and the needs of our nation.

For further information, please contact:
Lewis Rabkin
Cell: 082 497 3220

Issued by: Ministry of Public Service and Administration
30 May 2007