A wage deal has finally been clinched in the local government sector.

The SA Local Government Association (Salga) announced on Wednesday that a settlement, with a 3.5% salary increase for the first year of the three-year agreement, had been reached.

Salga, the employer body representing 257 municipalities, had been in protracted salary and wage negotiations with the SA Municipal Workers Union (Samwu) and the Independent Municipal and Allied Trade Union (Imatu) since March.

Samwu had demanded a one-year wage increase of R4,000 per month, a R3,500 housing agreement, an 80% employer medical aid contribution, six months' paid maternity leave and one month paid paternity leave. Salga had in turn offered a 2.8% salary increase.

In a statement on Wednesday, Salga said the salary and wage negotiations had now concluded and a collective agreement was unanimously agreed.

Salga said in respect to the current financial year, all municipal employees will receive an increase of 3.5% with effect from July 1, which is when remuneration of municipal employees is adjusted annually.

In addition, employees will receive a one-off, nonpensionable cash allowance of R4,000 for those earning a basic salary of R12,500 or less, and R3,000 for those earning a basic salary of R12,501 or more as at July 1.

For the second and third years of the wage agreement, the increase will based on the average consumer price index forecast by the Reserve Bank.

“The new collective agreement represents a compromise for all the parties and on the other hand it gives municipalities in financial distress a lifeline until 2023.

“It also means that should municipalities experience even more difficulties, they will have an opportunity to revisit the terms of the agreement,” Salga said in a statement.

Salga said the agreement also imposes a zero increase in some benefits, such as homeowner’s allowance and medical aid.

The employer body said reaching the deal was no easy feat as negotiators in the bargaining council deadlocked several times leading to a conciliator to be brought in after a facilitator’s proposal in August also failed to conclude the negotiations.

Salga said the collective agreement means that there will be stability in the sector in that there will be no need for year-on-year wage negotiations.

“The three-year collective agreement will enable municipalities to budget accurately in the medium term budgeting process.”

Imatu said the collective agreement had been signed by the trade unions. “However, the signature of the CEO of Salga is still outstanding. The agreement will be circulated once the signature is obtained,” Imatu said in a statement.

Samwu said it would comment later.

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