Big win for government in wage bill battle The Constitutional Court has dismissed an appeal brought by

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Big win for government in wage bill battle The Constitutional Court has dismissed an appeal brought by public sector unions after the government reneged on aspects of its collective wage agreement reached in 2018. While the state implemented wage increases for 2018/2019 and 2019/2020, it said that it could not increase the third clause relating to wages in 2020/2021 due to a lack of funding. It is estimated that implementing the final year of the three-year agreement would have cost the fiscus R38 billion. The Labour Appeal Court had previously found that the cost of the collective agreement could not be covered solely from the minister of Public Service Administration’s budget; that Treasury did not provide a written commitment to guarantee additional funding and no further agreements were made by other departments or agencies in accordance with the regulations. There were also concerns that the minister did not follow regulations 78 and 79 of the Public Service Regulations which require the department to be able to meet the fiscal requirements and Treasury approval. It also found the clause to be unlawful for violating sections 213 and 215 of the Constitution which requires fiscal transparency and effective financial management. The matter was subsequently taken on appeal by the various public sector unions to the Constitutional Court. The Department of Public Service and Administration (DPSA) and the Minister of Finance argued that organs of state are obliged to act within the confines of the law and that the collective agreement did not comply with the mandatory statutory provisions prescribed by regulations 78 and 79 since the DPSA could not cover the cost of the wage increases from its own budget. The various unions argued that the Labour Appeal Court failed to consider the doctrine of estoppel, which prevents the state from seeking to escape its contractual obligations. In its unanimous ruling, the Constitutional Court found that the regulations 78(2) and 79(c) created jurisdictional facts which must exist prior to the minister’s exercise of power to negotiate and conclude collective agreements on behalf of the state, absent which the minister acts without legal authority. The Constitutional Court found that these jurisdictional facts were not present and that non-compliance with the requirements of regulations 78 and 79 rendered the resultant collective agreement between the state and the trade unions invalid and unlawful, and thus unenforceable. The court, therefore, dismissed the applications for leave to appeal with no order as to costs. The ruling has significant ramifications for South Africa with the wage bill and potential payout seen as a major risk to the country’s fiscus. Remuneration costs account for about a third of total government expenditure, and agreeing to demands for continued inflation-beating increases would compromise the medium-term fiscal framework presented by Finance Minister Enoch Godongwana on Feb. 23.

Discuss the types of organisational conflict and evaluate which type of conflict is being presented in the case study. Additionally, assess the conflict management style the parties to the conflict are pursuing.