Govt, unions clinch wage and pension reform deal
The South African Local Government Association (SALGA) has signed off on a multi-year wage deal that it describes as “fair”.
This after it concluded negotiations at the Bargaining Council with the South African Municipal Workers Union (Samwu) and the Independent Municipal & Allied Trade Union (Imatu) on Wednesday, bringing the local government wage negotiations to an end.
The package also includes pension fund reforms and a financial relief mechanism for municipalities in financial distress.
The terms of the agreement can be revisited in the event of unforeseen financial circumstances during the period of the agreement.
SALGA chief negotiator Nolutshungu admits the negotiations were difficult but believes it’s a win-win deal.
“The collective agreement, in respect of this current financial year, stipulates that all municipal employees shall receive an increase of 3.5% with effect from 1 July 2021, a period in which the remuneration of municipal employees is adjusted every year, and a once-off non-pensionable cash allowance.
“The relationship between the salary increase and non-pensionable cash allowance can be best summarised as follows; while the salary increase of 3.5% is effective from 01 July 2021, the effect of the cash allowance becomes operational at a later stage,” Nolutshungu adds.
A further provision in the agreement is that inflation-linked increases in the outer years of the agreement will be based on the inflation outlook and projections made by the South African Reserve Bank.
“The new collective agreement represents a win-win outcome for the negotiating Parties and on the other hand, it gives municipalities who are in financial distress a lifeline and a breathing room.”
The wage talks took place on the backdrop of economic distress for some municipalities.
“The collective agreement means that the sector will be stable in that there will be no need for year-on-year wage negotiations. The multi-year collective agreement will enable municipalities to budget without uncertainty in the Medium Term budgeting process.
“Local government attention can now focus on service delivery and preparing the transition towards the 5th Term Democratic and People-Centred Local Government without interruptions,” says Nolutshungu.
Listen to Nolutshungu below:
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