S.Africa state employees return to work after strike

by reuters | Thomson Reuters Foundation
Tuesday, 7 September 2010 11:09 GMT

* Public sector workers returning to posts

* Unions say workers committed to improving lot

* Latest government offer would add to deficit strain

* Government says strikers won't be paid

(Adds government comment, business confidence indicator)

By Marius Bosch

JOHANNESBURG, Sept 7 (Reuters) - Hundreds of thousands of South African state workers returned to their jobs on Tuesday after suspending a three-week strike which hit schools and hospitals.

Officials from the 19 unions representing state workers gave themselves 21 days to finalise a draft agreement with their members that could end the conflict altogether.

Around 1.3 million workers had taken part in the strike which disrupted public services across Africa's biggest economy.

"The majority of our members have returned to work," said Manie de Clercq, spokesman for the 211,000-strong Public Service Association.

Nomusa Cembi, a spokeswoman for the South African Democratic Teachers' Union which has 245,000 members, said schools were expected to operate normally from Wednesday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a full menu of strike stories [ID:nLDE67Q0G1]

For a scenarios factbox [ID:nLDE67B0Q7]

For graphic on COSATU members: http://r.reuters.com/zeb77n

For a Q+A and labour relations [ID:nLDE6810Y6]

For a factbox on South Africa's strikes [ID:nLDE6850RR]

For an analysis on budget impact: [ID:nLDE67T1GX]

For wage bill graphic: http://r.reuters.com/nym48n

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Strikers had demanded a pay rise of 8.6 percent, more than double the inflation rate, and a 1,000 rand ($138.5) a month housing allowance. President Jacob Zuma's government raised its initial offer to 7.5 percent and 800 rand for housing.

The latest offer was rejected by rank-and-file workers last week but the union leadership suspended the strike anyway to give time to explain the offer to their members.

NO WORK, NO PAY

The government said it will not pay workers for the days they were on strike.

"The no-work, no-pay policy will be implemented and we are now collecting information on who was not at work," government spokesman Themba Maseko said.

He said the government wanted to resolve the matter soon.

"There is no confusion from our side. The 21 days is for unions to consult their members and explain the offer. We want to resolve this matter as soon as possible and hope to hear from the unions before the 21 days."

In South Africa, strikers are not compensated for missed work days by their unions and some have already forfeited nearly three weeks of pay.

"They have lost a lot of money but this shows how serious the workers were about improving their position. I think they have succeeded. Even though they haven't received the 8.6 percent they won other concessions," De Clercq said.

The prolonged labour action has highlighted tensions between the powerful COSATU labour federation and the African National Congress (ANC), whose governing alliance helped vault Zuma into the presidency in May 2009.

A deal based on the government's latest offer would put additional strain on already-stretched government finances.

South Africa is trying to rein in a budget deficit that totalled 6.7 percent of gross domestic product (GDP) in the fiscal year that ended in March. The government's budget for the current year, agreed in February, foresaw a more modest 5.2 percent wage increase for state workers.

As a result, government officials have said there is no room in the budget to further increase the pay offer, which would swell state spending by about 1 percent.

The country is still feeling the impact of South Africa's first recession in 17 years. The economy came out of recession in November 2009 but the recovery lags that of other emerging market economies.

Business confidence in South Africa is recovering, however. Data from the South African Chamber of Commerce and Industry on Tuesday showed the Business Confidence Index (BCI) rose to its highest level since September 2008 in August. [ID:nLDE68610L]

The chamber cautioned that the public sector strike will undermine the economic outlook.

"The outcome of the public servants' strike will have serious consequences for already tight fiscal circumstances as well as unintended consequences for employment prospects," it said.

The public sector strike -- the biggest since 2007 -- has had little impact on the South African bond, stock and currency markets. But economists said the labour action, which saw police use rubber bullets and water cannon against workers, cost the economy about a billion rand a day. (Addtional reporting by Peroshni Govender; Editing by Sonya Hepinstall)

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