Pretoria - Public sector workers suspended a pay strike on Monday as it entered its fourth week, union officials said.
The strike by 1.3 million workers has affected education, healthcare and the judiciary. Strikers have demanded a double inflation 8.6% pay rise and a R1 000 a month housing allowance.
"Labour has decided to suspend the strike and this does not mean we have accepted the state offer," 19 unions representing the state workers said in a joint statement. Workers have been instructed to return to work immediately.
The unions said they had 21 days to finalise discussions with their members on a draft agreement.
President Jacob Zuma
's government raised its offer to 7.5% and R800 for the housing allowance last week, but workers rejected the deal and unions asked for more time to explain the offer to their members.
"This is a victory in the history of the public service negotiations where the employer was forced to reopen negotiations," read the statement.
Government officials said the state could not afford the offer they had already put on the table and there was no more room in the budget to increase the offer, which would swell state spending by about 1%.
The biggest strike since 2007 in terms of lost man days has left bonds, stocks and the rand largely unaffected, but market players said the strike would cap gains by the rand and could have a bigger impact if it drags on.
Economists predict that the labour action is costing the economy about R1bn a day.