The South African Municipal Workers’ Union (Samwu) has warned Johannesburg’s incoming political administration against reneging on a controversial R10.3 billion wage agreement, arguing that the city should instead focus on cutting unnecessary outsourcing costs.
The call follows outgoing mayor Dada Morero’s signing of the multibillion-rand wage agreement on the eve of the local government elections.
The agreement, concluded between the City of Johannesburg and Samwu, has been fiercely opposed by National Treasury, which argues that it was signed unlawfully and is unaffordable for a municipality already facing severe financial challenges.
READ MORE: Africa’s richest city hit as National Treasury freezes funding for 69 municipalities
Finance Minister Enoch Godongwana has maintained that the city’s finances are under significant strain, citing mounting debt and concerns that the wage settlement was not adequately funded in accordance with the Municipal Finance Management Act (MFMA). Treasury has also warned that the agreement adds billions of rand in additional expenditure to an already constrained budget.
However, Samwu Johannesburg regional chairperson Lebogang Ndawo said the incoming administration must honour the agreement regardless of any political changes at the metro.
“We hope when the time comes for them to pay, they will not renege. They must honour the agreement and ensure that workers continue providing the services the city deserves,” said Ndawo.
He stressed that the union’s agreement was signed with the institution of the City of Johannesburg, not with any particular political office-bearer.
He said:
“We didn’t sign this wage agreement with an individual but with an office.”
Equality and pay parity
Ndawo rejected National Treasury’s characterisation of the agreement as a conventional wage increase, saying its primary purpose is to correct long-standing salary disparities within local government.
“National Treasury was of the view that this is a wage agreement, whereas it is a parity issue,” he said.
“It is addressing the injustices of the past, where white employees in the city earned more than their Black counterparts, and the principle of equal pay for work of equal value was not respected.”
According to Ndawo, the agreement also seeks to bring Johannesburg’s remuneration levels in line with those of other metropolitan municipalities with the same grading.
He pointed to waste collection workers as an example, saying employees performing similar duties in Gqeberha and Tshwane earn about R15,000 a month, while their counterparts in Johannesburg earn around R11,000.
“As a result, this increase is supposed to address that. These cities are graded at level 10 and their workers are remunerated accordingly, while Johannesburg is also graded at level 10 but workers are effectively paid on a lower scale,” he said.
Ndawo added that salary disparities become even more pronounced at higher occupational levels.
“What’s concerning is that the city manager and senior executives have been paid at grade 10 since 2018, while councillors are paid at the highest applicable level. The workers remain behind.”
Cut outsourcing, not worker pay
Rather than revisiting the wage agreement, Ndawo said the city should reduce its reliance on costly external service providers whose functions can be performed internally.
He cited fleet management contractors and debt collection agencies among the service providers that contribute significantly to municipal expenditure.
According to Samwu, eliminating duplicate outsourced functions could help the city contain costs while preserving the wage agreement.
Staggered payments
The settlement is being implemented in phases.
Ndawo said the city paid the first instalment of about R1.2 billion in March.
“The second payment was supposed to be R5.2 billion in July. However, the city reneged and did not include it in the budget. The final payment, which is the balance, is scheduled for 2027,” he said.
Cosatu backs agreement
Cosatu parliamentary coordinator Matthew Parks welcomed the agreement, describing it as a major victory for municipal workers.
“Cosatu welcomes the signed wage agreement between the City of Joburg and Samwu. This is a major victory for municipal workers, improving their wages and their ability to take care of their families,” Parks said.
He said the deal builds on previous commitments to improve workers’ conditions and could help boost productivity and service delivery.
READ MORE: National Treasury wants greater say over appointment of municipal CFOs
“This will improve workplace productivity and thus municipal services that working-class communities, businesses and the city depend upon,” said Parks.
“It sends an important message about the importance of collective bargaining and the value of employers and workers engaging to find solutions to matters affecting workers.
“It will be important for the incoming council to honour this agreement as part of rebuilding the city and returning it to its rightful place as the engine of South Africa.”
- The South African Municipal Workers’ Union (Samwu) has warned Johannesburg’s incoming political administration against reneging on a controversial R10.3 billion wage agreement, arguing that the city should instead focus on cutting unnecessary outsourcing costs.
- The call follows outgoing mayor Dada Morero’s signing of the multibillion-rand wage agreement on the eve of the local government elections.
- The agreement, concluded between the City of Johannesburg and Samwu, has been fiercely opposed by National Treasury, which argues that it was signed unlawfully and is unaffordable for a municipality already facing severe financial challenges.
- READ MORE: Africa’s richest city hit as National Treasury freezes funding for 69 municipalities Finance Minister Enoch Godongwana has maintained that the city’s finances are under significant strain, citing mounting debt and concerns that the wage settlement was not adequately funded in accordance with the Municipal Finance Management Act (MFMA).
- Treasury has also warned that the agreement adds billions of rand in additional expenditure to an already constrained budget.
