The financially distressed city of Tshwane — also Gauteng’s second-largest metro — has suffered a major blow following the South African Local Bargaining Council’s (SALGBC) decision to dismiss its application to be exempted from paying municipal workers’ salary increases to more than 29,000 employees for the 2022/23 financial year.       

In a 12-page arbitration award handed on 10 September, SALGBC’s Senior Commissioner Eleanor Hambidge ordered the city to immediately honour the collective agreement to grant workers a 5.4% wage increase, which was agreed upon in 2021.  

To honour the agreement, the city needs R600-million which it has reportedly said it cannot afford as it also battles to pay its creditors, including Eskom and Rand Water.  

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Hambidge said although it had been clear that the city was in financial distress with major liquidity problems, as indicated by national treasury mid-term recommendations, the Auditor General’s report and the Moody’s report, there were prospects, based on financial statements, that it would be in a better financial position in the months to come. 

“The 2022/23 annual financial statements do, however, indicate a slight improvement, but there are still challenges in relation to liquidity and being in a position to pay creditors. However, the budget for 2023/24 and I hasten to add that a budget projection indicates an overall increase in expenditure and income of 6% and thus it is anticipated that these measures will go a long way to ameliorate the applicant’s financial predicament,” said Hambidge.    

Reacting to the ruling, the city’s spokesperson, Selby Bokaba said, “Naturally, the city is disappointed with this ruling as we had provided solid arguments as to why the increases are unaffordable. The city embarked on a massive cost-cutting exercise by reducing the budget by 30% across departments.”     

Hambidge ruled that part of the reason for dismissing the application was because an outcome in favour of the city had the potential to undermine centralised collective bargaining in the sector.  

The findings of the council are final and binding, however, the city is entitled to challenge them at the labour court.   

The city planned to proceed with the challenge accordingly, said Executive mayor, Cilliers Brink.  “As much as the bargaining admits that Tshwane is in financial distress and that we’re in a very difficult position when it comes to paying increases, nonetheless, it declined our application.”

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“We believe that there are grounds for the review of this decision and that’s why we’re going to do it in the best interests of Tshwane and we trust that law and order in these circumstances will be maintained,” said Brink.     

Frivolous application

South African Municipal Workers’ Union (Samwu) general secretary Dumisane Magagula said the union welcomed the ruling dismissing Tshwane’s “frivolous” exemption application. On Tuesday the union will brief the media on the next course of action for workers. 

The ruling comes amid a six-week protracted strike by a handful of municipal workers which has crippled several service delivery functions including waste collection and at clinics where staff and patients were forced out of the buildings. 

Samwu is SA’s biggest local government union, representing more than 150,000 municipal employees countrywide. 

On  28 July, the city approached the Labour Court in Braamfontein, Johannesburg, on an urgent basis to halt what it described as unlawful and illegal protests by workers affiliated to Samwu “who intimidated their non-striking colleagues and caused damage to property”.

The court ruled in the city’s favour and declared the strike action unlawful and unprotected. It ordered the striking employees to disperse and stop participating in the unlawful strike. This, however, did not transpire and the strike turned violent.  

In one incident, over a week ago, two waste removal trucks were set alight. This led to some service providers withholding their services for safety reasons.

Bokaba said, “We have terminated the service contractors who were refusing to work and we’re making use of those who are willing to work and are going the extra mile to render services.”

A total of 123 employees have been axed for participating in the strike. 

No work no pay — salaries recalled

“We have also recalled salaries of those that reported for duty by signing in and out the attendance register, but failed to execute their duties,” Bokaba told Daily Maverick.

Samwu’s regional secretary, Precious Theledi confirmed that more than 400 members had been affected by the city’s decision to recall salaries, insisting the members in question had been on leave, sick, or had simply forgotten to sign the work attendance register. 

Another court bid

Samwu is now preparing to take the city to the Labour Court in a bid to compel it to return the recalled salaries and challenge the firing of the 123 employees. 

On Monday, Brink said the strike had been slowly dying out with most of the workers having returned to their posts and services likely to be restored in a matter of hours.  

“People are returning to work, obviously we have a massive backlog with waste collection but we have dedicated teams to catch up on that backlog, we are also seeing water and electricity teams returning to work slowly and as of tomorrow [Tuesday], Tshwane bus services will be back on the road.” DM