The Independent Municipal and Allied Trade Union (Imatu), one of the biggest unions in local government, has urged municipalities to not abuse an exemption clause in the recently signed wage deal, promising to oppose any frivolous applications by affording councils to be exempt from the agreement.
This comes after the SA Local Government Association, the employer body representing the country’s 257 municipalities, Imatu, and the SA Municipal Workers Union (Samwu) signed a five-year wage deal on Friday that will give SA’s estimated 300,000 municipal workers wage increases of 6% in the first year and consumer price inflation (CPI) linked increases over the next four years.
However, the wage agreement signed in the SA Local Government Bargaining Council, contains an exemption procedure — a requirement in terms of the Labour Relations Act as well as the council’s constitution — for municipalities that cannot afford the costs of the increases.
“Imatu’s focus in the wage negotiations was to ensure that exemption applications are subject to strict criteria and that there are firm deadlines for exemption applications to be submitted,” Solidarity general secretary Johan Koen said.
Municipalities will be required to establish that they cannot afford the costs of the increases and must provide evidence in the form of financial statements to substantiate their claims.
“The exemption will be heard and determined by an arbitrator appointed by the SA Local Government Bargaining Council, assisted by a financial expert who will provide financial advice to the arbitrator,” Koen said.
For this financial year, municipalities wishing to apply for exemption will have 45 working days from the date of the signing of the agreement to apply for exemption.
For years two to five, exemption applications must be submitted within 30 days of the municipal budget being approved or June 30, whichever is soonest. “Late applications will require an application for condonation.”
The wage agreement, effective from July 1 to June 2029, will cause employees receiving a 4.5% wage increase backdated to July and an additional 1.5% in March 2025. During the 2025/26 and 2026/27 financial years workers will receive CPI plus 0.75% and CPI plus 1.25% in 2027/28 and 2028/29.
Consumer inflation eased to 4.6% in July, the lowest rate since July 2021, from June’s 5.1% due to softer price rises in food and transport as a result of a lower fuel price.
The wage deal comes as the country’s 257 municipalities, which are grappling with fiscal pressures, systemic corruption and poor governance, are set to receive R379.6bn, 95.9% of the department of co-operative governance & traditional affairs’ allocated budget of R395.7bn over the medium-term expenditure framework.
In delivering his budget vote speech in Cape Town in July, department of co-operative governance & traditional affairs minister Velenkosini Hlabisa said the R379.6bn was designated for transfers to local councils and affiliated entities — all struggling to raise enough revenue to sustain themselves.
On Monday, Koen said parties to the bargaining chamber had, from this year, introduced a new mediation process. “Once an exemption application is received, the SA Local Governing Bargaining Council must appoint a mediator who must attempt to resolve the application by mediation within 30-days, unless the parties agree to a longer period.
“If mediation fails, the exemption application must be heard and determined by the arbitrator, assisted by the financial expert within 30 days,” he said.
“The purpose of the exemption’s procedure is to provide an avenue of relief for municipalities who genuinely cannot afford the costs of the increases. Whether this is indeed the case, can only be determined once the municipality has submitted its financial statements and a proper assessment of the financial status of the municipality can be made,” Koen said.
“Imatu will oppose exemption applications should we find, after we have examined the financial statements, that the municipality can in fact afford the increases.
“However, we have noted that some municipalities who are not happy with the terms of the agreement have in the past used exemptions as a means to effectively renegotiate the agreement.”
The exemptions criteria was clear that the application should not “undermine the agreement or the collective bargaining process”.
“We would therefore urge municipalities to only apply for exemption [if] they genuinely cannot afford the increases, and not use exemptions as a means to renegotiate the agreement,” Koen said.
“The arbitrator and the financial expert hearing the exemption application will closely examine the financial status of the municipality, and exemptions will be granted only [if] a municipality can establish a genuine inability to afford the increases.
“Imatu will also oppose exemption applications should we be of the view that the purpose of the exemption application is to undermine the collective agreement.”
In 2021 parties in the SA Local Governing Bargaining Council signed a three-year wage deal for increases of 3.5% (2021/22), 4.9% (2022/23) and 5.4% (2023/24).
The City of Tshwane refused to implement the last leg of the wage deal last year, saying it lacked the R600m required to implement it, and unsuccessfully applied to the bargaining chamber for an exemption.
After four months of illegal work stoppages by Tshwane metro employees, in which municipal property such as garbage trucks and other infrastructure were vandalised and set alight, the employees elected to quietly return to their posts in November 2023.
Samwu subsequently went the legal route and the matter is set to be heard at the labour court in November.
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