Pretoria, 23 March 2019 – The National Education Health and Allied Workers Union (NEHAWU) and Public Servants Association (PSA) have served SARS with a 7 day notice to go on strike from 28 March 2019. This is following a dispute that organised labour lodged at the CCMA in February 2019. The CCMA issued a certificate of non-resolution on Tuesday 19 March 2019. SARS enjoys a good relationship with organised labour founded on the principle of a higher purpose that all SARS employees espouse.

The current 3 year wage agreement that SARS has with organised labour expires on 31 March 2019. Consequently, SARS and organised labour, represented by the two recognised trade unions, NEHAWU and PSA, started the current round of negotiations in November 2018. The negotiations started with a pre-bargaining conference facilitated by the CMMA in early November 2018. The pre-bargaining conference helped the parties to commit to good faith bargaining, conduct that speaks to openness, honesty, trust and a speedy resolution of the negotiations. In the first official sitting of the negotiating parties, the chairperson of the SARS National Bargaining Forum, Mr Mahmood Fadal, tabled the negotiation framework and rules of engagement for the parties to adopt.

On 20 November, organised labour jointly tabled its consolidated list of 26 demands. The demands included a 15% general salary increase on total package, plus 25 other demands. Management sought clarity on these demands with a view to understanding the cost implications and feasibility thereof. The negotiations proceeded in December, January, February and March 2019.

During the course of the negotiations, 6 demands were withdrawn, 9 were referred to task teams between management and organised labour which would investigate and have further discussions post the wage settlement; and consensus was reached on 3 of the demands. The key demands that remain subject of negotiations are the general salary increase of 11.4%, term of the wage agreement, pay progression, provisions on family responsibility leave and prenatal leave, long service awards and exit gifts.

Given the current economic conditions, SARS finds itself in a very constrained fiscal position. In the spirit of openness and transparency, SARS agreed to setup a task team to look at the SARS financials. Several meetings took place where organised labour and SARS management looked for opportunities for cost savings that will improve the financial position of SARS going forward. Some of the proposals coming out of the task team will be implemented in the coming financial year.

Due to the constrained financial position, SARS started with an offer of 4% salary increase, for a three 3 year wage agreement linked to CPI. Organised labour revised their salary demand from 15% to the current 11.4% increase across the board for a single term. SARS revised its offer from 4% to the current 7% differentiated increase.

When the parties went to the CCMA on 8 March, organised labour was sitting at 11.4% plus the remaining demands. SARS had moved to 6%. The CCMA Commissioner tabled a commissioner’s proposal for settlement of 8% increase across the board for a single term. He asked the parties to go seek mandates from their principals, and to return to the CCMA on 13 March 2019. Given the financial situation that SARS is in, SARS was able to move to 7% differentiated increase, with a concession on prenatal leave, and agreement on long service award. The family responsibility leave was deferred to a future discussion once the implications have been worked out.

Organised labour rejected the CCMA Commissioner’s proposal, and decided not to move from their 11.4% increase across the board, and insisted on all the other outstanding demands except for long service awards and exit gifts where there is agreement. After further mediation by the CCMA Commissioner, organised labour offered a 9% increase as a settlement offer. SARS was not able to accede to this, and needed more time to consult with its principals. A meeting is scheduled for Monday 25 March for the parties to try and find each other on the remaining issues.

SARS is confident that the meetings arranged for Monday and Tuesday through the chairperson of the SARS National Bargaining Forum will yield results, and a settlement will be reached. SARS is funded through a grant like all other government departments. Due to the shrinking revenues and growing debt levels, the 3 year Estimate of National Expenditure (ENE) by National Treasury has reined in government expenditure over the next three years. Whatever wage settlement SARS enters, it should be within the ENE framework over the next three years.

SARS believes that the 11.4% increase demand of organised labour is out of reach in the current economic climate where CPI is sitting at 4.1% as of February 2019. SARS’ offer of 7% is 2.9 percentage points above CPI (that is, 71% above February CPI). SARS has a great employment value proposition for its employees, and has been rated as a leading employer brand in the last few years. SARS is hopeful that an agreement will be reached, and a strike will be averted. Both SARS and its employees remain committed to the higher purpose of collecting all revenues due to the state, and facilitating legitimate trade in and across South Africa’s borders.

The 2018/19 Revenue drive ends on 31 March 2019. In the Spirit of Thuma Mina, SARS calls on all taxpayers and traders to honour their tax obligations before 31 March 2019. As we face the 6th election of the democratic South Africa, a sluggish economy and an energy crisis, South Africa’s stability and sovereignty depends on a stable fiscus. SARS thanks all the taxpayers who have already made payments for their tax obligations.

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