Public sector unions asked the labour appeal court on Wednesday to force the government to implement the last year of its three-year salary increase agreement between the parties, amounting to R37.8bn.

The deal was signed at the bargaining council in 2017.

The government complied with the first two years of the agreement but not the third year, which began in April 2020.

When the unions approached the court to force compliance, the minister of finance launched a counter-application before the labour appeal court, which sat as a court of first instance on Wednesday. The minister sought an order declaring the third year of the agreement invalid.

The finance minister relies, among others, on section 79 of the public service regulations which state that on matters with fiscal implications, the National Treasury must provide a written commitment to provide additional funds.

In this case, the minister says, he has not agreed to provide additional funds, thus rendering the agreement invalid.

Ngwako Maenetje, counsel for unions Popcru, Denosa and Sadtu, said the state was obliged to approach a court to declare the collective agreement invalid and to set it aside. He said the state could not simply ignore the collective agreement and wait for enforcement proceedings before launching its counter-application. He said the collective agreement was binding on the state.

Maenetje added that there was substantial compliance with public sector regulation 79 because the ministers, including the finance minister, met as the cabinet to consider and approve the wage agreement.

Nehawu's legal counsel, William Mokhare, said he was in court only to oppose the counter-application.

Mokhare said, as at April this year, the state was fully committed to implementing the third year of the agreement — as stated in a letter to the unions. Mokhare said the only problem the government mentioned was that it did not have money.

Mokhare suggested the state should have sat down with the unions to find a way of implementing the agreement in phases.

“Everybody knows corruption has eroded the fiscus of the state,” Mokhare said, adding that  failure by the state to comply with the agreement was an impossibility of performance issue.

“It does not render the agreement invalid.”

Boyce Mkhize, counsel for the National Union of Public Service and Allied Workers' Union (Nupsaw), said the unlawfulness argument could not be self-created by the state.

Mkhize said the state knew it was signing the agreement and it was its duty to ensure it complied with its undertakings.

However, Jeremy Gauntlett, for the minister of finance, said that, at its narrowest, the case was about whether the public service regulations were complied with.

Gauntlett said regulation 79 designated a functionary who needs to approve further funding — and this was the Treasury.

“The correct functionary did not exercise the power. There can never be compliance if power is not exercised by the right entity. Regulation 79 recognises the finance minister. This is not technical,” he said.

One of the judges, Philip Coppin, said it was opportunistic that the issue of the legality of the agreement was raised so late, into the third year.

Gauntlett said the illegality loomed large when the Treasury brought its mind to bear and started “using magnifying glasses” to ensure there was compliance.

Tim Bruinders, for the minister of public service and administration, said the minister signed the agreement on the basis that it would not exceed the fiscal envelope of R110bn.

He said the minister sought to bring the cost of agreement below the envelope by,  among other measures, reducing the headcount.

The unions opposed the cost-containment measures, said Bruinders.

The court reserved judgment.

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