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Picture: File picture

Union sees red over meagre pay hike

By Vernon Mchunu Time of article published Apr 14, 2021

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DURBAN - THE proposed 2.8% salary hike put on the table by the municipal employer body was a major blow and an insult to low-earning workers, the South African Municipal Workers Union (Samwu) has charged.

Representing the country’s 257 municipalities, the South African Local Government Association (Salga) announced its offer as the wage negotiations were continuing at the SA Local Government Bargaining Council (SALGBC).

“Key to the elements of Salga’s proposal is an across-the-board salary increase of 2.8% for Year 1 (2021/ 2022 financial year), which is 1.5% below the projected CPI (Consumer Price Index) and a total freeze of increases on all benefits that are linked to salary increases,” Salga stated. It added that the proposal was made with the consideration that the local government sector had been one of the hardest hit by the effects of the Covid-19 pandemic.

“These negotiations represent a critical point in efforts to save municipalities from complete financial collapse. Salga is also proposing a three-year salary and wage collective agreement in order to continue to maintain stability in the local government sector, as well as support the sector’s sustainability requirements and objectives.

“Salga is cognisant of the deep recessions triggered by this pandemic, which is expected to leave lasting scars through lower investment, an erosion of human capital through lost work and schooling, and fragmentation of global trade and supply linkages.”

The employer body said some municipalities were unable to afford the current wage costs and would indeed have to apply no more than a zero percent increase in the 2021/22 Medium Term Review Expenditure Framework.

“As of December 31, 2020, 160 municipalities experienced a form of financial distress resulting in a serious material breach of financial commitments. Of these municipalities, 111 were experiencing severe financial distress resulting in persistent material breach of financial commitments,” said the association.

However, Samwu provincial secretary Nokubonga Dinga described Salga’s proposal as “insulting” to the workers.

“What Salga is offering is so insulting to our members, especially the lowest paid worker. For lowly paid employees, this 2.8% is so meagre it cannot even be described as a drop in the ocean. It will simply translate into around R140 or so,” a fuming Dinga said, adding that Samwu had demanded an increase that would be calculated in rands not percentages.

“We are yet to go back to our members, but at this stage of the negotiations we are vehemently opposed to this offer by Salga. In a nutshell this means we are deadlocked,” said Dinga, who would not be drawn to respond to the question of how municipalities that were in the red, including Msunduzi, were expected to afford the demands.

Samwu, which is the largest municipal labour union, with 160 000 members employed in the country’s municipalities and their entities, has placed its demands before the bargaining council.

They include a single year salary and wage agreement, a R4 000 salary increase for all workers across the board (with the exception of senior managers employed on fixed-term contracts), a R15 000 sectoral minimum wage, a R3 500 housing allowance for all workers, an 80% employer medical aid contribution with the employer contribution at 20%, a six-month fully paid maternal leave and one month fully paid paternity leave plus 25% employer contribution towards pension.

Samwu lashed out at the National Treasury, with the deputy secretary-general Dumisani Magagula saying the union “has not taken lightly the attacks on collective bargaining by the Treasury, (and so) we urge our members to be vigilant and combat-ready to defend collective bargaining as these negotiations begin”.

Dr Nthabiseng Moleko, a senior lecturer at Stellenbosch Business School, said it was high time South Africans moved away from viewing salary and wage growth from a microeconomic point of view.

“Wage or salary increases should be looked at from a macroeconomic viewpoint where higher income levels can serve as a stimulus to the economy. The consequence of falling wages, especially in a time of an economic recession, may lead to slow economic recovery. In a slump, you need to enhance income levels and not polarise income,” Moleko said.

In addition, she said, municipalities needed to focus more on industrial development-led economic growth strategy, reinvigorating industrial development, which would help boost the capacity of municipalities to generate revenue, especially for those municipalities with low-revenue levels like in rural areas.

The first three-day round of the wage talks, which sources described as heated, was to end last night before resuming in the second leg set for May, according to the terms agreed by parties at the SALGBC. Should there be no resolution still, the process would enter into dispute resolution in June – the last month of the local government financial year.

The Independent Municipal Allied Trade Union (Imatu) declined to comment yesterday, saying it would allow the bargaining council process to be finalised.

“We do not believe what is being put forward by Salga is cut in stone,” said Sipho Shinga, a member of the union’s national executive committee who also sits on the eThekwini regional bargaining council.


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