Home South African Treasury warns municipalities not to go overboard with salary hikes

Treasury warns municipalities not to go overboard with salary hikes

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Municipal and city managers have been warned that should they fail to consider salary increases within the ambit of available resources and financial position, this could constitute financial misconduct.

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Johannesburg – Municipalities have been warned to only budget for affordable salary increases this year and also consider the impact of the Covid-19 pandemic in their planning for wage hikes.

Negotiations at the SA Local Government Bargaining Council (SALGBC) are due to commence when the current agreement expires at the end of June.

Municipal workers are among the state employees who received salary increases last year, receiving 6.25% despite several municipalities applying for exemptions from effecting the wage hikes.

According to the National Treasury, some municipalities are already unable to afford the current wage cost and will have to apply no more than 0% increase in 2021/22 and exercise the option of exemption for any negotiated increase above the level of their affordability.

”Given the current (situation) exacerbated by the Covid-19 pandemic, municipalities are urged to consider projecting increases to wages that would reflect their affordability,” states the Treasury in a municipal budget circular dated March 8.

The Treasury also advised municipalities to take into account their financial sustainability when considering salary increases and previous wage hikes.

Municipal and city managers have been warned that should they fail to consider salary increases within the ambit of available resources and financial position, this could constitute financial misconduct.

Cosatu affiliate, the SA Municipal Workers’ Union (Samwu), has already indicated that it will demand a R4 000 across the board salary increase from the country’s 257 municipalities and their entities when wage negotiations start in June.

Samwu, which has over 160 000 members, resolved at its national collective bargaining conference last week that it will table its demand at both the SALGBC and the Amanzi Bargaining Council (ABC), which deals with labour issues in the country’s 12 water boards.

The ABC is also due to hold negotiations over salary increases when the current agreement lapses in June.

Samwu has cited the local government sector’s huge salary gap that needs to be narrowed to improve workers’ standards of living, and factor in increases in food and transport costs.

Another contentious issue that the SALGBC is dealing with is the payment of danger allowance to municipal workers who worked during the varying levels of the Covid-19 national lockdown.

SALGBC general secretary Bill Govender has told parties to the bargaining council – Samwu, the Independent Municipal and Allied Trade Union (Imatu) and the SA Local Government Association – that municipal workers will be paid an ex-gratia payment.

”The compensatory framework is not an instrument to measure the danger faced by employees, but rather it is a gesture for employees who worked during the lockdown for the full duration, from lockdown level five to lockdown level one,” said Govender.

He also indicated that the SALGBC will not negotiate danger allowance and that such talks must happen at municipal level.

Samwu and Imatu will have to discuss the matter with top municipal management and arrive at an amicable resolution, taking into account which employees in the essential services designation are exposed to dangers and hazards and the procedure to be applied for those identified to be eligible for danger allowance.

But the Treasury has told municipalities that due to the difficult financial situation posed by the Covid-19 pandemic, they must first determine whether or not they can afford a percentage increase to accommodate danger allowance, and ensure that including danger allowance will not place their financial position in jeopardy.

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