"The unions have no choice but to ballot their members for a strike," PSA deputy general manager Manie de Clercq said in a statement.
"The PSA is in the process of approaching its members to obtain a mandate on the united action from the unions which is to take place to resolve the matter. Our members are very enthusiastic in their support of the PSA," he said.
Union leaders would meet on Friday to decide what action to take. A strike was possible.
The union represents more than 210 000 public servants.
Wednesday's announcement follows month-long conciliation processes at the PSCBC.
The conciliation process, which started on June 18, resulted in the facilitator issuing a certificate of non-resolution on Tuesday.
"The employer's final offer on 9 June 2010 during the conciliation process remained unchanged at 6.5% across-the-board from 1 July 2010 plus housing allowance of R620 per month.
"The PSA and the other unions therefore did not have any other reasonable option, but to request the conciliator to issue the certificate," De Clercq said.
Entitled to exercise their rights
Also meeting on Friday to discuss a way forward are the leaders of unions affiliated to the Congress of SA Trade Unions (Cosatu) and the Independent Labour Caucus (ILC).
These unions have a membership of 1.3 million state employees between them.
"Regrettably, the public service unions and the state as employer could not reach an amicable settlement during the process of formal conciliation," they said in a statement.
"In terms of the Labour Relations Act, parties are now entitled to exercise their rights, including a possible strike, or attempt to resuscitate negotiations."
The unions were demanding an 8.6% wage increase a R1 000 housing allowance and the "equalisation of medical aid subsidy for members of medical schemes other than the Government Employees Medical Scheme (GEMS).
Their initial demand was for an 11% increase and a R1 650 housing allowance.
"The ILC is extremely disappointed with the latest developments as the ILC participated in absolute good faith and did its utmost to reach an amicable settlement.
A reasonable offer
"The hope is expressed that the state will reconsider its offer and table a more reasonable offer and not push unions in the direction of confrontation," it said.
The goal of Friday's meeting will be mainly to "determine the most appropriate options available to convince the state to return to the bargaining table with a more acceptable offer".
The ministry of public services and administration said it was "trying by all means to manage the process" and that it was still open to negotiations.
"We have lined up meetings with the unions with the aim of motivating the offer. We have exhausted what we had in terms of our budget.
"Because of the atmosphere and collaborative relationship we have
with the unions, they (union leaders) are going back to their members
to see what can be done, keeping in mind the tight budget of
the state," said Alex Mahapa, a deputy director general dealing with labour related issues.
- Sapa