Wage and pension deal for local government workers

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Parties at the SA Bargaining Council on Wednesday, September 15, clinched a collective multi-three year salary and wage deal for local government, bringing to an end the local government 2021 wage negotiations.

The South African Local Government Association (SALGA), the employer body representing 257 municipalities in the country has been in protracted salary and wage negotiations with the South African Municipal Workers Union (SAMWU) and Independent Municipal & Allied Trade Union (IMATU) since March 2021.

The salary and wage negotiations have now concluded and a collective agreement covering 2021/2022 & 2023 was voted unanimously which has a package of elements. Foremost, in the package is a multi-three year wage deal, pension fund reforms, a financial relief mechanism for municipalities in financial distress and for the terms of the agreement to be revisited should unforeseen negative economic circumstances arise in future during the period of the agreement.

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The collective agreement, in respect of this current financial year, stipulates that all municipal employees shall receive an increase of three and a half percent (3.5%) with effect from 1 July 2021, a period in which the remuneration of municipal employees is adjusted every year, and a once-off non-pensionable cash allowance as follows:

·       Employees earning a basic salary of R 12 500 or less as at 1 July 2021, shall receive an amount of R 4000.00.

·       Employees earning a basic salary of R 12 501 or more as at 1 July 2021, shall receive an amount of R 3000.00.

The new collective agreement represents a compromise for all the Parties and on the other hand, it gives municipalities who are in financial distress a lifeline and a breathing room until 2023. It also means that should municipalities experience even more difficulties going forward, they will have an opportunity to revisit the terms of the agreement. 

The agreement also imposes a zero increase in some benefits, such as home owner’s allowance and medical aid. The work on the pension restructuring will commence which will see several reforms in the body form.

Negotiations were no walk in the park

According to SALGA, reaching the deal was no easy feat as negotiators in the bargaining council deadlocked several times leading to a Conciliator to be brought in after a Facilitator’s Proposal in August 2021 also failed to conclude the negotiations. 

“The municipal wage negotiations took place in the backdrop of a severe financial economic distress environment imposed by the devastating global Covid-19 pandemic and SALGA approached the negotiations in mind to sustain the financial sustainability of municipalities, while balancing the interest of the labour to ensure peace and stability in the sector, as well as in ensuring the continuation of service delivery without any interruptions,” the association explained.

The collective agreement means that they will be stability in the sector in that they will be no need for year-on-year wage negotiations. The multi-three year collective agreement will enable municipalities to budget accurately in the Medium Term Budgeting process. Municipal employees will dedicate their full attention to rendering accelerated service delivery and the local government can also focus on preparing for the 5th democratic local government elections and the transition without any interruptions.

SALGA wishes to acknowledge the country’s municipalities for having provided meaningful support and a strategic direction that has assisted the wage negotiations processes to conclude. A special thanks go to the SA Bargaining Council for providing a conducive environment for wage talks, as well as to the labour unions for coming to the table and embracing the compromise.

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