Public servants to get 7% increase

Cape Town - Public sector unions and the government sealed an agreement on Tuesday night to raise wages by 7%, averting a potentially crippling strike by 1.3 million workers, a source at the meeting told Reuters.

Unions, who initially sought 15% before lowering demands to 10% during lengthy negotiations, will also get better housing and medical aid allowances.

"We have a majority [union signatures] on wages," the source said.