National municipal legislation in 2000 required municipalities to disestablish and to merge with other municipalities in order to function as more effective service delivery units. 46 local authorities in the greater Durban area were compelled to amalgamate and formed the eThekwini Metropolitan Municipality. This resulted in different employees performing the same function while being paid differently.

This disparity created frustration because employees felt that they were not remunerated equally compared with other employees who performed the same function at the same municipality. IMATU and the municipality attempted to resolve the issues and entered into negotiations. An agreement was reached which resulted in the conclusion of the Divisional Conditions of Service Collective Agreement.

The municipality implemented the terms of the agreement during April 2007. After the implementation, it became apparent that the collective agreement did not adequately address the disparity and that some IMATU members would not receive the relief required. IMATU indicated its intention of withdrawing from the agreement. The municipality was not willing to cooperate, sticking to the terms and conditions of the divisional agreement.

IMATU approached the Labour Court with a request that the divisional agreement be declared null and void. The basis for this application was that in terms of the SALGBC Main Collective Agreement, certain issues such as annual and sick leave, retirement fund matters, and medical aid benefits can only be negotiated at a national level in the SALGBC. The divisional agreement addressed issues which were not permitted in terms of the main collective agreement. IMATU argued that the divisional agreement was null and void and had no force and effect. The Labour Court agreed with IMATU and declared the divisional agreement null and void. The municipality decided to appeal the judgment of the Labour Court on various grounds.

The Labour Appeal Court dismissed the grounds of appeal. It found that the dispute was not about the interpretation of a collective agreement but rather whether parties may engage in issues which were specifically excluded from negotiations at a divisional level.

The Court said that the issues were specifically excluded in the main collective agreement and that the Labour Court was correct in declaring the divisional agreement null and void and of no legal force and effect.

The effect of this judgment means that SALGA, and some of its unpredictable member municipalities have now been sent a clear message that they can not engage on a divisional level – as they often do – in national issues.

IMATU will use the judgment to compel SALGA and its member municipalities to deal with national issues at a national level. This will have the added bonus that all IMATU’s members will receive the same benefits on issues such as leave, medical aid, and retirement fund benefits.