Benchmark for comparison | Tolerance around the 75th percentile | Inflationary parameter for increases | Differentials between academic ranks | Measure of sustainability | Negotiation process | Additional salary payments | Review of the pay policy agreement

1.    Benchmark for comparison

The academic pay policy agreement seeks to set levels of remuneration at amounts which enable the University to attract, retain and motivate staff, recognising the pre-eminent position it holds as a leading research-intensive university, nationally and internationally.

UCT’s academic salaries are benchmarked against a group of comparator universities, namely, those universities which share a similar research-led culture to that at UCT. These universities constitute UCT’s major competitors for staff and face similar challenges in terms of spending demands and opportunities to earn income. The agreed benchmark is chosen to balance the competing demands of simultaneously attracting and retaining staff with ensuring that the salary component of the overall budget does not negatively impact UCT’s ability to provide an operational environment (and budget) that competitively supports teaching and research as a leading university.

It is important that UCT remunerate academic staff towards the upper end of the salaries offered by comparator universities. UCT’s Standard Academic Salary Package (SASP) values at each rank will thus be compared against the 75th percentile (±3%) of the comparator universities' total guaranteed packages (excluding market/scarcity premiums and Head of Department allowances).

The following are the comparator universities to be used annually to benchmark against the 75th

1.1.    Pretoria University
1.2.    Stellenbosch University
1.3.    Rhodes University
1.4.    University of Witwatersrand
1.5.    University of Johannesburg
1.6.    University of the Free State 
1.7.    Nelson Mandela Metropolitan University
1.8.    University of KwaZulu Natal
1.9.    North-West University
1.10.  University of the Western Cape

2.    Tolerance around the 75th percentile

The policy sets an acceptable tolerance of ±3% of the 75th percentile of the comparator universities' total guaranteed packages excluding scarcity, market premiums and Head of Department allowances to guide negotiations for annual increases for academic staff. Any deviations outside of ±3% will inform negotiations for substantive agreements going forward from that year.

3.    Inflationary parameter for increases

The inflationary parameter to be used for increases informed by National CPI of May of the preceding year as the National CPI year is the measure used by the universities in the comparator group for granting of salary increases but the 75th percentile will take priority in deciding increases.

4.    Differentials between academic ranks

The agreed differential between ranks is 18-22%, with 20% being the ideal. The tolerance above and below the ideal of 20% ensures that the target is not kept excessively rigid and allows for minor adjustments between ranks if motivated for on strategic grounds. Any such changes must occur without impacting the total academic salary budget as determined by increases applied to all ranks.

5.    The measure of sustainability

Financial sustainability is a necessary consideration in any pay policy. The underlying financial health of the University needs to be ensured and this is covered in the Council approved Finance Policy. The pay policy provides the framework to determine the quantum of the annual salary increase in support of the academic project. It is agreed that an evaluation of sustainability needs to be made to include at least the following indicators, when determining salary increases: the impact of agreed salary increase on revenue versus expense projections over three years, the projected surplus relative the budget targets, and the evaluation of free cash as targeted within the range of 20% -30% of total annual operating costs.

It is also understood that any significant change to revenue that is likely to have a medium to long- term effect on the financial sustainability of the university can be raised by Management in any discussion on sustainability: an example would be a significant change in subsidy formula.

6.    Negotiation Process

The salary negotiation process will proceed in the following steps where all deadlines are binding except when varied by mutual agreement:
6.1.    1 July management provides the Union with:
6.1.1.    A financial sustainability report and outlook informed by Section 5;
6.1.2.    CPI values at May (National CPI);
6.1.3.    A comparison of UCT’s SASP against the 75th percentile          benchmark of comparator universities informed by Section 1 with total guaranteed packages excluding scarcity, market premiums and HoD allowances for that year.
6.2.    1 August a formal meeting is held with the AU to discuss Managements assessment of the overall salary bill against the test of being financially sustainable.
6.3.    31 August the AU provides in writing its demands for the salary      increase and non-salary demands.
6.4.    Either party may raise the issue of differentials between ranks and recognise that any proposed changes must occur within the total salary bill for that year as determined by applying CPI.
6.5.    If parties reach agreement about the salary rise taking into account any agreed minor changes to the differentials between ranks, then the negotiation process for the salary increase is complete.
6.6.    A dispute may occur should agreement fail to be reached on:
6.6.1.    Whether the salary rise determined by applying CPI is sustainably affordable, or
6.6.2.    What an appropriate differential is between ranks.
6.7.    Should a dispute be declared, then both parties agree to resolution via interest arbitration.

7.    Additional Salary Payments (Scarce, Strategic, Merit and Excellence payments)

In addition to standard remuneration at SASP towards the top of the academic market, it is important that UCT recognises market forces prevalent in some disciplines, the need to act strategically on occasion to attract or retain high performing staff or for reasons of transformation, and to reward high performing staff between promotions. The following (under review in 2022) will continue to form part of academic remuneration:

7.1.    Scarcity payments (discipline and individual; internal or external funding)
7.2.    Strategic payments to individuals
7.3.    Merit awards
7.4.    Excellence awards

In addition, UCT will investigate and report on policies of payment for subsidy earning research outputs at other universities.

8.    Review of the Pay Policy Agreement

The new Pay Policy Agreement may be reviewed should circumstances require it. Relevant circumstances include:

8.1.  Very large shifts in levels of inflation;
8.2.  Significant changes in the mandate of the Reserve Bank with regards to inflation targeting; 
8.3.  Data indicating a failure to attract and retain quality academic staff;
8.4.  Large shifts in government policy on funding in higher education;
8.5.  Significant changes in higher education sector funding (subsidy; allowed fees) indicating that the agreed increases are neither affordable nor sustainable.

This pay policy agreement remains in force and is binding on both parties until a new Pay Policy Agreement has been reached.

Approved by Council: 22 June 2023

Page last updated 27 June 2023