Unions had gone to court to try to impose a collective agreement in 2018 that promised their members inflation-related increases for three consecutive years. The central issue is whether the government should pay public servants pay pay increases that were due to come into effect in April 2020 as part of a three-year contract in 2018. The unions argued that the fact that the Department of Finance did not approve the funds did not matter, since the Minister of Finance was part of the cabinet that approved the agreement. The labour court ruled that it would be illegal for unions to impose recent wage increases because it violated parts of the Constitution and public service rules. The payroll is the most expensive item in the state budget, and the growing deficit means that the state must cut spending urgently. This is one of the main reasons cited by the rating agencies for a further downgrade of its investment ratings two weeks ago… JOHANNESBURG, Dec 15 (Reuters) – South Africa`s government won legal proceedings on Tuesday over public sector pay increases it rejected, strengthening efforts to address a gaping budget deficit and rising debt. Regulation 79 deals with collective bargaining and provides that the Department of Finance must allocate funds if the public service and administration does not have enough in its budget or must approve it to remove it from other households. None of this happened in this case. The government is not required to pay increases to public sector employees after the Labour Court of Appeal gave it a significant profit by declaring the implementation of a controversial agreement illegal, BusinessLIVE reports. The government kept wages flat in April and said it could not afford increases due to the COVID 19 pandemic.

The needs of a small group of public sector workers, who have smart jobs with stable incomes, do not outweigh the needs of millions of South Africans who may be vulnerable during economic times, the labour court said when it rejected a union request to force the government to pay its wage increases until 2020.