Salga signs five-year wage deal with municipal unions

The SA Local Government Association (Salga), the employer body representing the country’s 257 municipalities, has signed a historic five-year wage agreement said to foster stability within the embattled sector.

Municipalities are at the coalface of service delivery in the country and wage negotiations in the sector in the past few years have been characterised by violent and long strikes, intimidation and dismissal of union members.

The pay deal, signed on Friday after three rounds of wage talks in the SA Local Governing Bargaining Council, will see SA’s estimated 300,000 municipal workers getting wage increases of 6% in the first year and consumer price inflation (CPI) linked increase over the next four years.

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 agreement, which is effective from July 1 to June 2029, will see 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.

The SA Municipal Workers Union (Samwu) and the Independent Municipal & Allied Trade Union (Imatu) had tabled a joint list of revised demands for an across-the-board increase of 8% in the first year, CPI plus 2% in the second year and CPI plus 1.5% in years three to five.

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%) from the department of co-operative governance & traditional affairs’ allocated budget of R395.7bn over the medium-term expenditure framework.

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.

Tabling the consolidated report on local government audit outcomes for 2022/23 in parliament in August, auditor-general Tsakani Maluleke said only 34 municipalities received a clean audit — down from 38 in 2021/22 — with the DA-run City of Cape Town the only one of the eight metros to achieve it.

Fruitless and wasteful expenditure surged to R7.4bn in 2022/23 from R4.8bn in the previous year.

Local government’s worsening state has spurred the government to focus the second phase of Operation Vulindlela on fixing councils. Vulindlela is a joint initiative of the Treasury and President Cyril Ramaphosa’s office, created in 2020.

Salga cast the wage deal as an “unprecedented achievement in the local government sector and broader public service”.

Dumisane Maluleke, general secretary of Samwu, the largest union representing more than 166,000 employees in the sector, said the wage deal represented “stability, consistency and long-term benefits for municipal workers”.

“The extended duration of this agreement will provide municipalities with the fiscal predictability necessary to improve planning, service delivery and employee welfare.”

As part of the agreement, all conditions of service linked to salary increases — such as allowances — will increase by the same percentage in all financial years. “However, in the first year of the agreement, housing allowance and employer contributions to medical aid will increase by 4.5%.”

Municipal staff earning R22,000 or less a month, who do not receive a housing allowance, will receive a one-off R2,000 in the first year.

“Samwu firmly believes that this salary and wage collective agreement is the best possible outcome for our members and the broader municipal workforce,” Maluleke said.

The introduction of a five-year agreement, the first of its kind, would provide a solid foundation for stability within the local government sector, he said. “As this historic collective agreement takes effect, Samwu will remain vigilant in ensuring that every municipality fully complies with its terms. No worker should be deprived of the salary increases and benefits they are rightfully owed.”

mkentanel@businesslive.co.za