NEWS
14/06/2018 06:33 SAST | Updated 14/06/2018 07:13 SAST

Government Offers Severance Packages To Contain Costs After Wage Increases

For the first time in 20 years, government will offer severance packages to employees over the age of 60 because if cannot afford its public sector wage bill.

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Several thousands of public workers march trough the streets of Cape Town central business district on August 26, 2010.

For the first in time in 20 years, and just days after signing a three-year wage agreement with public sector employees, government will start offering voluntary severance packages to government staff over the age of 60, Business Day reported.

The wage agreement recently signed follows a threat to strike by thousands of government workers, and reportedly exceeds Treasury's budget by R30-billion.

In a statement, the department of public service and administration reportedly said measures to contain costs would now have to be taken.

These include encouraging early retirement by increasing the pension funds of those who take it, more effective management of allowances, and reviewing government's performance management systems, Business Day reported.

It was too early to say how many jobs would be affected, the department reportedly said, but thousands will be affected.

In an interview with Business Day in May, Public Service and Administration Minister Ayanda Dlodlo warned that government had reached the ceiling of what it could afford in terms of salaries, and said that critical services might be affected because of this.

Government employees were going to strike on Monday. According to MoneyWeb, 50 percent of unions signed a bargaining council agreement on Friday. The agreement reportedly includes increases of up to 7 percent in the first year, and of up to projected inflation rate plus 1 percent in the second and third years.