7 May 2026
Comrades, members of the media, workers and the public.
COSATU and FEDUSA address the country today following weeks of political, legal, institutional and bargaining work undertaken by organised labour to defend public servants against an unaffordable GEMS contribution increase that was imposed on workers at a time when wages are under pressure and household costs continue to rise. This work included formal mass protests, the handing over of memoranda of demands, direct engagements with the GEMS Board of Trustees, engagement involving the Minister for Public Service and Administration as the employer, preparation for escalation through the NEDLAC Section 77 processes, and continued consultation with members who made it clear that the 9.5% increase could not stand.
GEMS has now formally responded to COSATU and FEDUSA. In its letter, GEMS confirms our call for the withdrawal of the 9.5% weighted contribution increase and its replacement with a lower rate, together with additional matters raised in labour’s demands. GEMS further confirms that the Board of Trustees considered the submissions of the federations, including the memoranda from the protest marches, and has approved a revision of the proposed weighted contribution increase to 7.5% – a 2% reduction, effective 1 July 2026, subject to approval by the Council for Medical Schemes.The victory we want to share with public service workers and our members today is that GEMS has been forced to retreat from the 9.5% increase. The immediate triumph secured by workers is a two-percentage point reduction from the increase that had been imposed on public servants. That movement did not come as a favour.
It did not come as a public relations gesture on the part of GEMS, but it came because UNITED organised labour applied pressure through the proper political, legal, bargaining and mobilisation channels. All this, because workers refused to accept that they must simply absorb contribution increases decided above their heads.
We must be clear. GEMS has not agreed to every demand placed before it, and the revised increase remains subject to regulatory approval by the Council for Medical Schemes. But the Scheme has moved from the position it had previously defended. It has now acknowledged, in writing, that the affordability pressures raised by members were real enough to require a revision. The original demand of organised labour was clear. The 9.5% increase had to be withdrawn and replaced with a revised, affordable and socially defensible contribution structure developed in consultation with labour. We took this position because public servants had already absorbed a painful 13.4% increase in 2025, followed by the 2026 shock increase, at a time when food, transport, electricity, debt repayments, rent and school-related costs continue to punish the working class and their families.
This fight was never only about a percentage. It was about what that percentage does in the life of a worker. It was about the nurse, the teacher, the police officer, the correctional services officer, the clerk, the technician and every public servant who opens a payslip and sees medical aid costs cutting deeper into money that must still carry the household.
GEMS has sought to explain its position through claims utilisation, cost pressures, reserve ratio considerations, actuarial advice, financial stress testing, affordability analysis and long-term sustainability. COSATU and FEDUSA do not dismiss the need for sustainability. What we reject is the idea that sustainability can be built by pushing the burden of institutional failures onto workers. The engagements exposed a deeper failure within GEMS. They showed that the Board and executive management allowed fraud, corruption risks, procurement weaknesses, outsourcing costs, administrative excess, claims leakages, poor benefit design decisions and weak financial controls to define the Scheme without a credible, timeous and member-centred strategy to stop the bleeding. This is not a worker failure. It is a governance failure. Public servants cannot be expected to pay more because those entrusted with the Scheme failed to act with the urgency, discipline and accountability required of them.
We welcome the two percentage point reduction as a concrete gain for members. But we must be honest with workers and with the public. A retreat from 9.5% does not erase the failures that gave birth to this crisis. It does not answer all the questions around administrative costs, outsourcing, fraud and leakage, benefit design, reserve management, executive accountability and the unilateral changes that angered members. It does not automatically repair the trust that has been damaged between GEMS and public servants. That is why COSATU and FEDUSA will not allow this victory to be turned into a public relations exercise. The reduction was won through pressure, and the same pressure must now be used to force lasting reform.
We therefore place on record that the remaining demands of organised labour remain alive. We still require full financial transparency from GEMS, including disclosure of administrative expenditure, managed care contracts, a review of outsourcing arrangements, procurement costs, executive and Board remuneration, and the real drivers of contribution increases. We still require an independent forensic audit into governance practices, procurement processes, outsourcing expenditure, fraud, leakages and executive accountability. We still require a review of the funding and reserve model so that regulatory compliance is not used mechanically to punish members. We still require meaningful engagement on Tanzanite One and the unilateral changes that placed additional burdens on members who were already choosing lower-cost options because the Scheme had become unaffordable.
GEMS has also asked whether it remains necessary for organised labour to proceed with the Section 77 hearing at NEDLAC. COSATU and FEDUSA will approach that question soberly, collectively and strategically. The Section 77 process was not pursued in vain. It was pursued because healthcare affordability for workers in South Africa is a socio-economic matter, and because workers needed a protected route to escalate if GEMS and other schemes refused to move.
COSATU and FEDUSA believe if this reduction is to become the beginning of a serious reset, then GEMS must come to the table with transparency, binding timelines, proper disclosure, and a credible programme to address cost drivers before they reach members’ pockets.We will now engage GEMS on the practical implementation of the revised increase, including the effective date of 1 July 2026, the implications for members who have already paid the 9.5% increase, communication to members, the CMS approval process, and how any future savings arising from claims management, operational efficiencies or cost containment will be passed back to members. We also expect GEMS to enter a formal and structured engagement framework with organised labour. Never again must workers be told after decisions affecting their salaries and benefits have already been made. Engagement must not be a courtesy call after the damage is done. It must be meaningful, documented, time-bound and capable of changing outcomes.
GEMS was created as a social solidarity scheme for public servants. It was not created to operate like a commercial medical scheme that treats workers as a revenue base and affordability as an inconvenience. The Scheme must return to its founding mandate of social solidarity: affordable, equitable and quality healthcare for public servants and their families.
Today, COSATU and FEDUSA salute the workers, shop stewards, organisers, affiliates and leaders who refused to allow this matter to be buried under boardroom language. Public servants have shown that when workers are organised, disciplined and united, they can force institutions to move. This is not the end of this chapter for labour but the first victory in a wider fight for affordability, transparency and accountability. Affordable healthcare is not a privilege. It is a worker right!!
Issued jointly by COSATU and FEDUSA
For interviews and inquiries:
Zanele Sabela
Cosatu Spokesperson079 287 5788/ 077 600 6639
Betty Moleya
FEDUSA Media and Communications
063 736 5533
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