A pay settlement for employees in the local government sector was signed on Friday, the SA Local Government Association (Salga) said.

“This is historic not only because it provides a platform for stability and certainty for the forthcoming years, but importantly it builds on and consolidates a culture of partnership,” said Salga chairman Thabo Manyoni.

Members of the SA Municipal Workers Union (Samwu) and Independent Municipal and Allied Trade Union (Imatu) would receive a 6.5 percent wage increase backdated from July 1 this year, and an additional 0.5 percent increase from January 1.

Subsequent increases would be linked to the Consumer Price Index.

“This multi-year wage agreement is an example of what can be achieved when parties are committed to achieving a swift and amicable outcome,” Imatu general secretary Johan Koen said in a statement.

Samwu could not immediately be reached for comment.

Manyoni said municipalities were facing a cash crunch as revenues decreased, and consumer debt rose.

“The deal reflects a concrete attempt at achieving that fair balance, given the competing needs of the parties,” Manyoni said.

He said the parties decided to postpone concluding a collective agreement on pension funds until the end of the year. - Sapa