Salga wants to cut wages in real terms
• Municipal bosses head for showdown with public sector unions after offering 2.8% pay hike
Trade unions and municipal bosses are heading for a showdown after the SA Local Government Association (Salga), the body representing the 257 municipalities, called for financially distressed municipalities to cut wages in real terms and freeze other perks linked to wage hikes.
Salga has proposed a 2.8% wage increase for 2021/2022, below the 2.9% inflation rate recorded in February and the 4.3% average the Reserve Bank expects for 2021. Most municipalities in July 2020 started to implement a multiyear agreement that raised wages by 6.25% a year, which some of them had not budgeted for. The Treasury warned it would compromise their fiscal framework and service delivery.
In a strongly worded letter, seen by Business Day and addressed to SA Local Government Bargaining Council (SALGBC) general secretary Bill Govender, Salga CEO Xolile George proposed a three-year wage deal with an option for parties to “opt out” based on unforeseen circumstances. The SALGBC is an organisation in which bodies representing councils and unions agree on collective agreements and resolve disputes.
George called on municipalities to hike salaries in line with available resources, saying failure to do so would constitute financial misconduct.
Any agreement also needed to incorporate an “exemption dispensation” for non-affording, least-affording or just-affording municipalities that had been independently assessed by a panel of financial experts. George said some municipalities struggling with the current wage costs would have to apply “no more than a 0% increase”.
The Treasury embarked on a collision course with unions in 2020 by calling on municipalities to apply for exemption from implementing standing wage agreements. This was after finance minister Tito Mboweni announced deep cuts to the public sector wage bill over the next three years — a decision the unions said was tantamount to a “declaration of war”.
Late in 2020, the Treasury, which is seeking to contain spending, won a court case after its decision not to implement the last part of a three-year agreement angered unions.
On Monday, Zwelinzima Vavi, general secretary of the SA Federation of Trade Unions, called for an indefinite strike.
“This is leading us straight to the collapse of collective bargaining in the country. There is no point of submitting demands when the other party can withdraw from the agreement willynilly. It’s very unfortunate.”
George wrote in the letter that municipalities were advised to take their financial sustainability into account when considering wage hikes. He stated that over previous years salary increases were above inflation. “In addition, municipalities that could not afford such increases did not apply for exemption.”
The Salga CEO said 160 municipalities as at December 31 2020 had experienced a form of “financial distress resulting in serious material breach of financial commitments”.
Keith Swanepoel, regional secretary of the Independent Municipal and Allied Trade Union, which represents about 80,000 workers, said they were demanding a “9% wage hike or R2,500, whichever is greater”. He said wage negotiations should be given a chance.
The SA Municipal Workers Union, the biggest local government union body representing about 160,000 workers, is demanding a one-year wage agreement of a R4,000 salary increase across the board and other benefits.
Its deputy general secretary, Dumisane Magagula, told Business Day on Monday that negotiations were just beginning and the union was not in a position to discuss the Salga letter.