By Antoinette Slabbert.
The City of Tshwane has been dealt a huge financial blow after the Local Government Bargaining Council dismissed its application to be exempt from paying staff a 3.5% salary increase in 2021/22.
It was ordered to pay the salary increase, which would have cost the council R489 million in that year, retrospectively within six months.
This is expected to amount to at least R2 billion.
In addition, the increase will be reflected in an increase in payroll in coming years.
Attempted revenue boost ‘unlawful’ while debt drain worsens …
This comes against the background of the metro’s controversial cleaning levy, budgeted to generate R530 million in revenue in the current year, being declared unlawful and scrapped in the High Court in Pretoria earlier this year.
The city has petitioned the Supreme Court of Appeal to try and overturn this ruling, and the matter is still pending.
To add insult to injury a report to council last week showed the rate at which consumer debt is collected has dropped by 12% to only 81% over the year ended 30 September.
This raises serious questions about the sustainability of the modest progress that has been made with the turnaround of Tshwane’s finances.
The municipality may, however, also attempt to appeal the latest ruling, which would temporarily suspend its implementation.
‘No money, no increases’
The dispute over the salary increases has a long history.
At the time, the council of the multiparty coalition led by former mayor Cilliers Brink of the DA, decided not to budget for the increases – Brink maintained there simply was no money.
This decision, Brink said in a statement following the bargaining council ruling, was supported by the ANC and ActionSA in council.
The increase was the first in a three-year wage agreement.
Two years later, Brink’s administration again refused to implement that year’s 5.4% increase.
Workers then reacted angrily, embarking on an unprotected strike that lasted more than three months and caused extensive damage to municipal property.
The city had applied for exemption from the wage increases.
In April 2022, the bargaining council ruled on a technical point in favour of the workers regarding the 2021/22 increase, but the municipality appealed to the Labour Court – which set aside the ruling and referred the matter back for reconsideration by the Bargaining Council.
This is the ruling that has now been delivered.
Panel’s findings
The panel found the metro had deliberately failed to budget for the increase while at the same time substantially increasing spending on contracted services.
It said the compilation of a municipal budget inherently involves prioritising certain expenditures over others, and this – rather than an actual lack of funds – was the reason the city decided against the increase.
The issue of the 5.4% increase was decided in favour of the metro by the Labour Court on appeal.
However, the unions – the Independent Municipal and Allied Trade Union (Imatu) and the South African Municipal Workers’ Union (Samwu) – have petitioned the Labour Appeal Court, and that matter is still pending.
Unions respond
Lynette Burns-Coetzee, Imatu regional manager for Tshwane and Limpopo, welcomed the ruling and said Brink’s earlier decision placed enormous physical and emotional strain on Imatu members.
She said the union “knows that the non-payment of increases since 2021 has placed tremendous of physical, mental and emotional stress on our members”.
Samwu described the judgment as an affirmation of workers’ dignity and a victory over the arrogance of the city administration.
“For years, while the city played endless legal games, workers in Tshwane and their families have been subjected to severe and unjust economic hardship,” it said in a statement.
“These delays forced our members to face soaring costs of living without the crucial salary adjustments that were legally due to them. This hardship was not just a misfortune, it was a direct consequence of the employer’s deliberate actions to shirk a binding collective agreement.”
Ruling ‘legally flawed’
DA Tshwane spokesperson on finance Jacqui Uys called the ruling legally flawed and financially ruinous.
“If not taken on review, the decision will be paid for by residents in the form of deteriorating service delivery and infrastructure,” she said, adding that the ruling had seemingly been made without regard for the city’s current financial position.
Uys believes there are strong grounds to take the matter on review in the Labour Court.
“Failure to do so would derail the city’s entire financial recovery process.”
Uys said the DA will write to city manager Johann Mettler to publish the city’s exact assessment of the costs of implementing the latest bargaining council award – “a fact which will confirm that the backdated salary increase is completely unaffordable and places the financial sustainability of the municipality in serious jeopardy”.
City’s response
The City of Tshwane said in a short statement that it “received the exemption application arbitration award today [3 November] and the city manager, together with the executive, will consider all aspects on the implications of the award, and thereafter communicate its decision”.