Will City of Joburg’s historic pact with labour unions work?

The City of Johannesburg has signed a groundbreaking pact with labour, granting unions access to its intricate budget planning processes. The city says unions are crucial stakeholders that should be consulted on the matter.

Access to the city coffers could strengthen the unions' hand in wage negotiations as they would know how much the metro could afford in pay hikes. Involving the workers at the budgeting process could also help reduce industrial action that has sometimes turned violent.

The city, led by DA mayor Herman Mashaba, has the biggest budget of all the metros in SA with R64.5bn budgeted for the 2019/2020 financial year.

On Monday, the city together with the SA Municipal Workers' Union (Samwu) and the Independent Municipal and Allied Trade Union (Imatu), signed what they described as a historic and first-of-its-kind memorandum of understanding, aimed at promoting harmonious labour relations between the stakeholders and advancing service delivery.

The agreement was also aimed at driving performance management and to generate a more conducive environment for the city to better serve its residents and to ensure that work stoppages became a last resort. 

As part of the pact, Samwu and Imatu will now take part in the city's budget planning processes, a move that has been described as “unwise” by labour consultant Tony Healy. 

Healy said there were two schools of thought on the matter. “The first is that it's unwise because it gives labour access to confidential information that could be prejudicial to the city,” he said.

“The other argument says this is a consultation process, which means [unions] have no decision-making authority, and that it makes good industrial relations sense.”

By way of example, Healy said in Germany, trade unions sit on the boards of directors, a move that bodes well for a transparent and open labour system. “Germany is going through some difficulty at the moment, but for years it has been an economic powerhouse.”

He said the agreement between the city and the labour unions was not unheard of. “What the city is doing has worked elsewhere in the world in different scenarios. It's not guaranteed, however, that it will work here.”

But Mashaba said that as representatives of the metro's staff complement of more than 35,000, organised labour had a “critical perspective in the execution of service delivery”.

“In the past, the unions were never party to the budget planning processes,” said Mashaba, who succeeded the ANC's Parks Tau as mayor in August 2016.

The multimillionaire mayor, who was running his businesses before his foray into politics, asked how the city would spend its multibillion-rand budget without input from labour unions, which he described as “big stakeholders”.

City manager Dr Ndivhoniswani Lukhwareni said: “Participating in the budget [planning process] doesn't mean your input is final, it means you're considered.” He said that unions now being part of the budget process would be of benefit to all stakeholders.

Imatu regional chair Keith Swanepoel said the agreement showed that there was a clear desire to improve service delivery to residents and that the metro become a high-performance city.

He stressed that the pact was not taking away their right to embark on strikes to force the employer to accede to whatever demands they might have. "We still have the right to strike, we are not signing anything away. We can still strike.”

However, Dr Valencia Ntombi Khumalo, member of the mayoral committee for group corporate and shared services, said the agreement had put measures in place to ensure that grievances were resolved long before unions took to the streets.

Samwu regional chair Vuyani Singonzo said they would improve harmonious labour relations in the city and would encourage their members to report any wrongdoing they encountered.

“We hope the agreement will be a success,” he said.

Labour analyst Michael Bagraim said: “I know that Mr Mashaba supports joint decision-making. That’s his style of management. As long as he is not pushed to agree to things that are contrary to the development of the city, I don’t have a particular problem with [the agreement].”

He said with the city being one of the biggest employers in the region, “one would hope there would be an open relationship between the stakeholders. I think [the agreement] is very similar to what they have in Cape Town”.

“It does make for better management at the end of the day.”

mkentanel@businesslive.co.za