salaryThe Independent Municipal and Allied Trade Union (IMATU) is pleased that an agreement has been reached in the South African Local Government Bargaining Council (SALGBC) regarding a multi-year wage agreement.

“While we submitted our acceptance of the Facilitator’s Proposal on 27 July 2015, our acceptance was in principle, and subject to all parties accepting the Proposal. In addition, our acceptance was subject to the parties convening a technical working group to craft a mutually acceptable salary and wage collective agreement,” explained General Secretary Johan Koen.

IMATU met with SALGA (the Local Government Employer’s Organisation) on Sunday, 23 August 2015 to finalise six matters that were outstanding. These issues were successfully resolved.

The Agreement makes provision for a three year agreement with an initial across the board wage increase of 7%, effective from 01 July 2015. Local government employees will receive the average annual Consumer Price Index (CPI) plus 1% in both year two (2016/17) and in year three (2017/18). The wage agreement also contains an acceleration clause which stipulates that if the CPI falls below 5%, inflation will be deemed 5% and similarly if the CPI increases beyond 10% then it will be deemed to be 10%. This effectively means that workers are guaranteed a minimum salary increase of 6% in years two and three.

All new employees will become members of defined contribution pension funds with an employer contribution of 18% of basic salary.

Over and above the aforesaid, IMATU also resolved the following issues at the meeting with SALGA on 23 August 2015:

1. The maximum medical aid contribution of employees will increase to R 3 871 with effect from 1 July 2015. Employees receive 60% of their medical aid contribution up to this maximum of the R 3 871;
2. Employees that have a pension fund contribution rate of more than 18% will retain their better contribution rate;
3. A clause was inserted that states that other benefit and allowances that are linked to the wage increase shall also increase;
4. The parties will attempt to conclude an investigation into the housing allowance dispensation by 31 March 2016;
5. Employees that receive a non-pensionable allowance on housing on 1 July 2015 will continue to receive the allowance, until the housing investigation is concluded.

IMATU has, for a number of years, pushed aggressively for improvements to the local government housing allowance which has proved dismally inadequate in promoting home ownership amongst our members. IMATU is therefore pleased that a way forward has now been agreed.

“With effect from 1 July 2015, the home owner allowance will increase to R700 per month. This amount will increase annually, for the duration of the agreement,” said Koen.

The agreement recognises that extending the home owners allowance to as many employees as possible, is a long term process. Some employees do not qualify for government housing assistance yet earn ‘too little’ to qualify for bond approval through commercial institutions, thus creating a ‘gap market’. A working group shall be established to determine an appropriate allowance for ‘gap market’ employees. In the interim, such employees will be paid a R350 non-pensionable allowance.

“While the negotiation process has been long, we believe that decisive leadership and effective communication has resulted in all parties coming to an agreement,” concluded Koen.