Sars too broke to fully implement salary increases

THE dispute between the SA Revenue Service (Sars) and unions representing its employees, could be heading back to court after the taxman indicated that it cannot afford the pay hikes dating back to 2021.

Hundreds of Sars staff members were expecting negotiations between their representatives – the Public Servants Association (PSA) and the National Education, Health and Allied Workers’ Union (Nehawu), and the employer, to start last month.

However, according to the PSA, at a three-day task team meeting in January, Sars reported that due to financial constraints attributed to reduced budget allocations by the National Treasury, the tax revenue collector was unable to implement the salary increase directed by the Gauteng High Court, Pretoria Judge Elizabeth Kubushi, in November last year.

In addition, Sars indicated that without additional funding from the National Treasury, the implementation of Judge Kubushi’s ruling in full would necessitate more cost-cutting measures such as the non-filling of vacant posts, non-renewal of building leases, a strict travel approval process, voluntary severance packages, and possible retrenchments.

Sars also issued an internal communiqué earlier this month, pleading with its employees to accept a once-off settlement of 2% back pay from April 2021 to March 2024 (36 months), and a 1% salary increase to the guaranteed total package as at March 31, 2021.

It promised that should employees accept the offer it would be processed this month.

Sars said the reality was that implementing the judgment was unaffordable, and would have dire immediate financial consequences.

The taxman stated that Sars needed to embark on alternative implementation options within its affordability, which can be funded by savings through concerted cost containment actions.

Sars added that it had withdrawn its application for leave to appeal the November judgment, because it wanted to resolve the dispute in amicably.

The PSA then approached its members to establish whether or not to reject Sars settlement proposal and insist on the full implementation of the high court judgment, or accept the reduced settlement suggested by the taxman – once-off settlement of 2% back pay from April 2021 to March this year and a 1% salary increase to the guaranteed total package.

The union also informed its members that the once-off settlement of 2% back pay would not increase pension contributions but tax deductions would apply, and only the proposed 1% salary increase would impact on pension contributions.

”The PSA implores members to carefully consider the implications if they accept the offer of the employer, as it may have dire financial implications on members in the short term and on their long-term pension growth,” the union explained.

It added: ”It is disconcerting that the employer indicated to the PSA on February 8, 2024 during a working group update meeting, that it is disappointed that the PSA offered enforcement as an option during the ballot process”.

The PSA maintained that any settlement proposal should have been presented before the November judgment.

According to the union, it had undertaken to commence enforcement proceedings and get its legal team to action this in the coming days with the majority members’ approval.

The PSA opposed Sars’ process, which it said would be biased and disregard collective bargaining, and urged its members to refrain from direct and individual engagements with their employer without union representation.

A Sars employee said the settlement offer was only made after PSA members rejected their employer’s proposal through union voting, but Sars claimed it did not believe the voting results to be correct.

The employee who is not authorised to speak to the media, said: ”There’s fear of victimisation if we don’t vote, and if you reject it, (it’s) the same thing.”

Sars spokesperson Anton Fisher and Nehawu did not respond to questions from the Sunday Independent.

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