IMATU has secured an exemption outcome ordering the City of Tshwane Municipality to pay the salary increase for the 2023/2024 financial year to its employees.

IMATU welcomes the order that was issued on 11 September 2023 by the arbitrator appointed by the South African Local Government Bargaining Council (SALGBC). In terms of the exemption outcome, the City of Tshwane Municipality was directed to comply with the salary and wage agreement concluded in 2021. This means that the City of Tshwane Municipality must pay the 5.4% salary increase to its employees with effect from 1 July 2023.

IMATU opposed the City of Tshwane’s exemption application and put up a strong case in opposition thereto. IMATU demonstrated that the municipality reported a surplus of R 1,698bn for the month of June 2023, compared to a deficit the previous year, which showed that the municipality’s financial position was steadily improving. Accordingly, IMATU argued, that the municipality is in fact able to pay the increase.

IMATU further argued that the municipality has deliberately and unlawfully resolved to defy the mandated (5.4%) CPI increase in its salary and wages budget. Notwithstanding this, the City, rather astonishingly relied on its own unlawful conduct as a ground of exemption.

The arbitrator agreed with IMATU and stated from the outset, in her ruling, that she is inclined to dismiss the exemption application. The arbitrator found that while the municipality may be in financial distress, there has been an improvement in its in financial position. The municipality also budgeted for a 6% increase in income and expenditure and this will go a long way to improve the municipality’s financial predicament.

The arbitrator further compared the municipality’s budgeted expenditure (R12 640 889 388) with its actual expenditure (R 11 494 593 387) and found that this effectively left a surplus of R 1 146 296 001, which is sufficient to cover the wage increase of R 602 million. Finally, the arbitrator found that granting the municipality’s exemption application could potentially undermine centralized collective bargaining in the local government sector. Accordingly, the municipality’s exemption application was dismissed.

The exemption award is final and binding but the arbitrator advised parties of their right to take the award on review to the Labour Court. IMATU, however, calls on the municipality to implement the salary increase instead of wasting millions in ratepayer money on legal fees to take the matter on review.

For further information please click on the links below: