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Unions, state in final wage deal

Oct 19 2010 19:05 Reuters

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Johannesburg - Public sector unions, representing about 1.3 million workers have accepted a government wage hike offer, bringing a formal end to a strike that shut school and caused chaos in hospitals, officials said.

"We have a deal. The unions that will sign from today constitute a majority," Chris Klopper, a spokesperson for the Independent Labour Caucus federation, said on Tuesday.

The government offered the workers a raise of 7.5%, about double the inflation rate, and R800 a month for housing. Unions were seeking 8% and R1 000.

The three-week strike through most of August cost the economy an estimated one billion rand a day, damaged support for the president and led to millions of days of lost work at government offices, schools and hospitals.

It was suspended in early September with workers returning to their jobs.

The agreement relieves pressure on President Jacob Zuma and the ANC by easing friction with the country's largest labour federation Cosatu, which took part in the strike and is in a governing alliance with the ANC.

The deal will probably swell state spending by between 1% and 2% of the budget, putting pressure on the government to consider tax increases and budget cuts elsewhere.

The housing allowance will cost about twice as much as the government spends on environmental protection and is much more than a new plan to expand antiretroviral therapy in the country with one of the world's highest infection rates of HIV and Aids.

The wage deal will be applied retroactively from July, union officials said. The government needed at least 50%  of the unions representing striking workers to agree to the deal for it to go into effect.
cosatu  |  public sector strike
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