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Local Executive clinches a wage and pension reform deal

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Local Executive clinches a wage and pension reform deal

Press Release from SALGA

Early Newspaper

Parties at the SA Bargaining Council on Wednesday, 15 September 2021, clinched a multi-year salary and wage deal for local government, bringing to an end the local government 2021 wage negotiations.

The South African Local Executive Association (SALGA), the employer physique representing 257 municipalities in the country has been in salary and wage negotiations with the South African Municipal Staff Union (SAMWU) and Unbiased Municipal & Allied Trade Union (IMATU) since March 2021.

The salary and wage negotiations have now concluded and an agreement overlaying three financial years from 2021 – 2024 was voted unanimously which has a package of salary based and associated measures. Fundamental, in the package is a multi-year wage deal, pension fund reforms, a financial reduction mechanism for municipalities in financial harm and for the terms of the agreement to be revisited may silent unexpected negative financial circumstances arise in future at some point of the duration of the agreement.

The collective agreement, in admire of this latest financial year, stipulates that all municipal staff shall receive an increase of three and a half p.c (3.5%) with end from 1 July 2021, a duration all over which the remuneration of municipal staff is adjusted every year, and a as soon as-off non-pensionable cash allowance.

Non-pensionable cash allowance to be bought as follows:

  • Workers earning a basic salary of R 12 500 or much less as at 1 July 2021, shall receive an amount of R 4000.00.
  • Workers earning a basic salary of R 12 501 or extra as at 1 July 2021, shall receive an amount of R 3000.00.

The relationship between the salary increase and non-pensionable cash allowance can be greatest summarised as follows; whereas the salary increase of 3.5% is efficient from 01 July 2021, the end of the cash allowance becomes operational at a later stage. To mitigate the impact of paying these cash allowances, the agreement envisages an extended timeframe within which municipalities can make adjustments to their latest value range in relate to fulfil this obligation unless they have applied for exemptions.

A additional provision in the agreement is that; inflation-linked increases in the outer years of this agreement can be based on the inflation outlook and projections made by the South African Reserve Bank.

The new collective agreement represents a capture-capture final outcome for the negotiating Parties and on the alternative hand, it offers municipalities who are in financial harm a lifeline and a breathing room.

The agreement also imposes a zero-rated increase in some benefits, such as dwelling owner’s allowance and medical aid. The work on the pension restructuring will open which is able to examine several reforms in the physique originate.

Reaching the deal was no easy feat as negotiators in the bargaining council deadlocked several occasions leading to a Conciliator being brought in after a Facilitator’s Proposal in August 2021 also failed to enact the negotiations.

The municipal wage talks took place in the backdrop of a severe financial financial harm atmosphere imposed by the devastating global Covid-19 pandemic and SALGA approached the negotiations in mind to sustain the financial sustainability of municipalities whereas balancing the pastime of the labour to be certain peace and stability, as well as in guaranteeing the continuation of service delivery.

The collective agreement means that the sphere can be stable in that there can be no want for year-on-year wage negotiations. The multi-year collective agreement will enable municipalities to value range without uncertainty in the Medium Term Budgeting task. Local government attention can now give attention to service delivery and preparing the transition towards the fifth Term Democratic and Folks-Centred Local Executive without interruptions.

SALGA needs to acknowledge the country’s municipalities for having equipped strategic route and meaningful enhance that has assisted the wage negotiations to enact, Labour Parties for contributing to this task and the SA Bargaining Council for providing a conducive atmosphere for the wage talks.

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Local Executive clinches a wage and pension reform deal