Cederberg Municipality’s attempts to back out of wage agreement thwarted

The Cederberg Municipality in the Western Cape has been ordered by the SA Local Government Bargaining Council (SALGBC) to pay this year’s salary increments after it lodged an application to renege from a wage deal, citing financial distress.

The municipality was party to a three-year wage agreement signed at the bargaining council. It paid the first leg of the increment last year.

A month before this year’s increase was due to be paid, Cederberg lodged an application at the SALGBC to be exempted from paying wage increments to its 345 workers.

Trade unions SA Municipal Workers Union (Samwu) and the Independent Municipal and Allied Trade Union (Imatu) opposed the application.

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In her ruling on Monday, arbitrator Arthi Singh-Bhoopchand said the municipality’s financial problems did not happen overnight and that it ought to have budgeted for the wage increments.

“The historical factors that led to these challenges, for example, the Covid -19 pandemic, have been bubbling since early 2020. The municipality was aware or had to have been aware for some time of the financial challenges.

“Yet it resolved only as late as May 2022 to apply for an exemption, and that too after choosing not to budget for the increase. It is indeed so, as strongly argued by the second respondent that this is tantamount to doing things backwards.”

‘Workers’ wages not prioritised’

Despite the financial problems, the municipality paid consultants and agreed to repay its Eskom debt at an additional interest rate of 2,5% above prime.

Such decisions, said Singh-Bhoopchand, showed that officials never prioritised worker’s salaries.

“Other expenditure like contracted services, consultants’ fees and unfunded mandates, have not been fully motivated and substantiated relative to the cost of the salary increase.

The municipality has chosen not to budget for the increase. This effectively means, when one looks at the budget as a whole, that it has failed to prioritise the increment. There is no evidence before me that the municipality had no other option in terms of budget prioritisation,” she said.

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In its application, the council submitted financial performance statements, the 2022/2023 budget and bank balances as at 30 April 2022. It also submitted cost cutting measures and a financial recovery plan, which Singh-Bhoopchand noted was only approved at the time the application was lodged.

Union threatens court action

According to Samwu general-secretary Dumisane Magagula, at least 13 municipalities had so far tried to renege on the wage agreement.

“We argued before the bargaining council and throughout, the council has ruled in our favour in those cases.

“After signing the multi-year collective agreement at the bargaining council through the employer body Salga, the same municipalities renege in a manner that Cederberg has attempted to. They spent money on frivolous expenditures – cars for councillors and R50 million on consultants but won’t pay wage increase for workers.”

He added that should Cederberg still refuse to pay, the next step would be to seek a compliance order at the SALGBC.

“If they do not abide by the compliance order, we will go to court for a writ of execution against the municipality,” he said.

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The Newcastle Municipality in KwaZulu-Natal has also not paid this year’s wage increment, and hasn’t lodged an application for exemption, Imatu said in a statement on Wednesday.

The SALGBC has since issued a compliance order against the municipality and a date for the arbitration hearing will soon be set.

Mayor who made a u-turn against his party

Cederberg, previously governed under a Democratic Alliance (DA) and Freedom Front Plus (FF Plus) coalition, is led by Mayor William Farmer.

Farmer turned on his own party, the DA, when the Patriotic Alliance and the African National Congress (ANC) launched a motion of no confidence in former mayor Ruben Richards two months ago.

Richards, a leader of the local residents’ association, was part of the DA coalition.

When voting results reached a tie, Farmer flipped his allegiance and voted along with the ANC and PA in favour of the motion.

The two parties thanked him by installing him as mayor in the power sharing deal.

The municipality is headquatered in Clanwilliam and covers areas such as Citrusdal, Lamberts Bay, Graafwater and surrounding villages and farms.

It was one of the several hung councils after the 2021 local government elections.

Cederberg has been dodged by allegations of corruption and mismanagement, including Covid-19 PPE fraud that saw the SIU raid the municipal building in 2020.

In an emailed response, spokesperson Anthony Mlata said: “Cederberg Municipality, as a responsible organisation, respects and upholds the rule of law at all times. The municipality participated in good faith in the exemption hearing and shall act in good faith and in accordance with the outcome of the order.”

*The municipality’s response was received days after publication and has been added

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