PRODUCTIVITY SA MANAGEMENT STATEMENT ON NEHAWU STRIKE
Productivity SA Management confirms that members of the National Education, Health, and Allied Workers’ Union (NEHAWU) falling within the Bargaining Unit are on strike with effect from the 13th of November 2023. The picket is taking place at all the Productivity SA Offices, namely Midrand, Durban, and Cape Town in line with the picket rules which were facilitated by the Commission for Conciliation, Mediation, and Arbitration (CCMA).
The decision by NEHAWU to embark on a strike action follows a series of salary negotiations for the 2023/24 financial year with the union. The parties reached a deadlock and NEHAWU declared a dispute regarding the salary increases for the 2023/24 financial year. NEHAWU demands a 9.5% (which includes a 2% salary increase linked to financial performance in the 2022/23 financial year). It should be stated the financial performance of the entity in the 2022/23 financial year resulted in a deficit, therefore, the 2% was unaffordable and could not be granted.
Productivity SA can only afford a 4% salary increase for employees falling within the Bargaining Unit (salary levels 12 and below), and any salary increase above the 4% will result in the entity incurring a financial deficit (projected at R8m for financial year ending 31 March 2024) and a negative going-concern status, which may render the board to be trading recklessly and in breach of the Public Finance Management Act (PFMA).
Despite efforts to find common ground, a deadlock occurred, and the matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) for arbitration, which was not successful.
Productivity SA wishes to clarify the following:
a) Management considered the demand of Cost-of-Living adjustment salary increase by staff. However, the Entity cannot afford the demand of 9.5% given the entity’s funding shortfall. The Board had approved 3.5% salary increase for the 2023/24 financial year for staff on level 13 and above even though this will increase the budget deficit. The offer of salary increase is 4% to staff on level 12 and below including Gap Closure to the qualifying employees.
b) Management was negotiating in good faith taking into consideration that the Entity could be faced with the going-concern challenges due to the budget deficit.
c) Productivity SA cannot offer salary increases beyond 4% as this may result in the Entity incurring a deficit (projected at R6,1 million) in the 2023/24 financial year, which offer will impact its going-concern position and render it technically insolvent. The entity is not supposed to budget and/or incur a deficit in terms of the PFMA, which is viewed as reckless trading.
d) The final offer for Level 13 and above remains at 3, 5% and level 12 and below at 4%, which will be paid retrospectively from April 2023.
This resolution was based on numerous factors which included that a projected budget deficit of R6,1million for the 2023/24 financial year will be incurred if the 4% and 3, 5% salary increase is offered respectively from the 1st of April 2023 retrospectively. Furthermore, the budget cut of 10% on the grant allocation by the National Treasury, which reduces the Department of Employment and Labour grant to Productivity SA from R62,9million to approximately R59,1million. This is also subject to possible further adjustments that may be introduced with the Estimates of National Expenditure (ENE) budget cycle between October 2023 – December 2023 as National Treasury implements cost containment measures for all public entities to reduce the cost pressures to the fiscal and economic conditions. It also crucial to take into account the cost containment measures to prevent build up risks of exposing the Entity to being insolvent. The average CPI of 5% was also considered. Management has to ensure that the total cost of Compensation of Employees for the entity does not exceed the Department of Employment and Labour grant allocation. This was all done to demonstrate that the Entity prioritises job security for all employees, whilst also avoiding trading recklessly.
Regarding the allegation that Management has already given themselves increases, we wish to point out that Management took a decision that the increase for the 2023/24 financial year for Level 13 and above will remain at 3, 5% and will be paid on 25 October 2023 to all eligible employees backdated from the 1st of April 2023 with Gap Closure first then the salary increases. Furthermore, the salary increases for the 2023/24 financial year offer for level 12 and below has been revised from 3, 5% to 4% pensionable salary, Cost-of-Living salary adjustment for all eligible employees. The payment will be effected upon finalisation of the negotiations for salary increases with NEHAWU, since the matter has been referred to CCMA. The sequence would be Gap Closure first then salary increases to all eligible employees backdated from the 1st of April 2023.
Productivity SA Management will continue negotiating in good faith taking into account the interests of employees but ensuring that no reckless trading takes place. Management also respects the right of the staff to protest and is actively engaging in strategies to protect our collective business interests and ensure that operations continue seamlessly, in accordance with Section 64 of the Labour Relations Act (Right to strike and recourse to lock-out). To ensure the safety and security of our staff, a comprehensive contingency plan is in place. This plan aims to safeguard access to the building for those not participating in the strike. Lastly, the picketing rules that outline the guidelines and regulations regarding any picketing activities that may occur during the strike have been agreed to and have to be respected by all parties.
Productivity SA Management recognises the concerns and impact that the current strike may have on our employees and the operations of our organisation. We remain committed to maintaining transparent and constructive communication throughout the resolution process. We understand the significance of the right to strike as a fundamental labour right, and we respect our employees’ decision to exercise this right. As we navigate through these negotiations, we encourage ongoing dialogue and the sharing of perspectives. We believe that, through respectful communication, we can work together to find common ground and reach a resolution that serves the best interests of our employees and the organisation as a whole.
Productivity SA is also committed to doing everything humanly possible to avoid disruptions on service delivery. We will continue providing support services to companies participating in our Business Turnaround and Recovery and Competitiveness Improvement Services Programmes, as we believe this support will result in these enterprises preserving and creating jobs, which this country needs the most.
For further information or clarification, please contact our designated spokespersons as follows:
• Mr Mothunye Mothiba, CEO of Productivity SA, mothunyem@productivitysa.co.za/ 082 771 3266
• Dr Nandi Dabula, Executive Manager, Corporate Relations, nandid@productivitysa.co.za/ 082 820 7604.
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