The West Rand District Municipality is still locked in a stalemate with the SA Municipal Workers Union (Samwu) over non-payment of third party contributions.
The municipality failed to contribute to workers’ medical aid and provident funds for three months after officials invested over R70million in now liquidated VBS Mutual Bank.
The municipality’s executive corporate services manager, Rethabiseng Mokebe, said the VBS investments dated back to February 2015, and everything was above board.
“Since the initial investment with VBS in 2015, the municipal investments were deemed to be in compliance with its banking and investment policy as well as the Municipal Finance Management Act (MFMA),” said Mokebe.
“Towards this end, compliance reports on a periodic basis were submitted to relevant stakeholders, authorities and oversight institutions. Up until the date of curatorship, none of these institutions raised a query about such investment with the exception of the National Treasury, which sent an email to the functionary responsible for managing municipal investment in August 2017.”
However, the union accused officials of bringing in more local municipalities into the district due to self-interest. “What is happening here is that these guys allocated some local municipalities into the district for their own interest.
It (the district) was growing but does not generate income like local municipalities,” said Samwu regional secretary Siseko Siyothula, adding that the VBS investment was none of their business.
“They (the authorities) took some departments to the district and there was no budget to pay employees running the services. The employer should meet the workers’ demands, and we don’t care about the investment with VBS.”
Meanwhile, Gauteng Premier David Makhura’s spokesperson, Castro Ngobese, said a task team had been appointed to resolve the deadlock by convening meetings with all affected parties to present a framework to stabilise the municipality.
“The premier has appointed a team of MECs working closely with labour, district municipality and national government to find a solution to the challenges besieging the municipality. Our broad objective is to make sure that all challenges are addressed in a very structured and systematic manner to avoid disruption of service delivery. We are hopeful that a solution will be found very soon,” said Ngobese.
In the same breath, labour law expert Chris Marais said the government must ensure that employees do not lose their jobs. “No medical aid will cover an employee if their fees are not paid. And God forbid someone dies. The family would have to get legal help to get the money out. The ruling party needs to step in. The leaders were appointed by employees and they should be responsible. No jobs must be lost because of this,” said Marais.
An economist also echoed Marais’ sentiments, calling for the national government to intervene in distressed municipalities. “The big issue here is how the bankrupt municipalities become solvent and be able to pay their workers.
Apart from investment with VBS, the incompetence of the management also led to this crisis. These need to be solved by the national government because I don’t see the municipalities rehabilitating themselves,” said Nedbank chief economist Dennis Dykes.