IMATU turns to the Labour Court as the CCMA’s Intervention in City of Tshwane’s wage increase dispute fails
The Independent Municipal and Allied Trade Union (IMATU), representing 109 700 employees in the local government sector, will proceed with its opposition to the City of Tshwane’s Review Application in the Labour Court against its failed exemption outcomes.
This as the intervention by the Commission for Conciliation, Mediation and Arbitration (CCMA) in the City of Tshwane’s wage increase dispute ended without a positive result.
The dispute stems from the City’s failure to pay the following salary increases to its employees:
1. An increase of 3.5% which was due and payable with effect from 1 July 2021. The City applied for exemption in March 2022. This exemption application failed as it was dismissed by an arbitrator appointed by the SALGBC. The City subsequently filed a review application in the Labour Court to set aside the exemption outcome.
2. An increase of 5.4% which was due and payable on 1 July 2023. The City applied for exemption in August 2023. This exemption application also failed as it was dismissed by an arbitrator appointed by the SALGBC. The City subsequently filed another review application in the Labour Court to set aside this exemption outcome.
The abovementioned salary increases were all due and payable in terms of a valid collective bargaining agreement (the Salary and Wage Collective Agreement, dated 15 September 2021) that was concluded between SALGA, representing all municipalities, and IMATU.
Following the outbreak of industrial action in the City of Tshwane, the CCMA staged a conciliatory intervention in the dispute, in the public interest, based on a process outlined in Section 150 of the Labour Relations Act. The trade unions and the City of Tshwane participated in the intervention process.
In the efforts to reach an amicable resolution of the dispute, the parties explored a number of settlement options. This was followed by the following settlement offers being exchanged.
The Trade Unions’ Settlement Offer
On 6 March 2024, the trade unions jointly proposed the following settlement offer:
1. That the 2021 salary increase (3.5%) be paid in installments. The first installment was to be paid by 30 April 2024 and the second installment by 30 September 2024.
2. That the 2024 salary increase (5.4%) be paid retrospectively to 1 September 2023 (instead of 1 July 2023), such payment also to be paid in instalments. The first installment (for the period September 2023-April 2024) was to be paid by the May 2024 salary run and the second installment (for the period May 2024-June 2024) by the June 2024 salary run.
3. The salary scales of employees must be adjusted accordingly to incorporate the above increases.
4. Employees who have been dismissed for reasons pertaining to the strike action must be reinstated. However, where disciplinary action against an employee is deemed necessary, such action must be taken with strict adherence to the Disciplinary Code Collective Agreement.
5. The proposed terms to be accepted as in full and final settlement of all Labour Court disputes with each party paying their own legal costs.
This settlement offer was however rejected by the City of Tshwane on 20 March 2024.
The City of Tshwane’s Settlement Offer
On 5 June 2023, the City of Tshwane presented, what it termed a final settlement offer, which was structured as follows:
1. A lump sum, once off, payment to employees in two equal instalments to be paid during in the July and August 2024 payroll runs.
2. This lump sum would be made up as follows:
2.1 Task Grade 1 – Task Grade 14 employees: An amount equal to 2.7% of basic annual salary; and
2.2 Employees at Task Grade 15 and above: An amount equal to 1.78% of basic annual salary.
3. This settlement offer was, however, conditional on the City of Tshwane receiving its equitable share and national fuel level due from National Treasury, as well as the approval thereof by the City’s municipal council.
The City’s settlement offer was duly presented to IMATU members for consideration. As part of our mandating process, our members were advised of the advantages and disadvantages of settlement. On the one hand, a settlement of the dispute would mean an immediate and final resolution of the dispute. This should be weighed against the cost and lengthy duration of defending the two review applications in the Labour Court, which also carries the risk that a judgement may not go our way.
On the other hand, accepting the lump sum settlement offer would also require our members to forfeit their rights to the salary increases of 3.5% for 2021 and 5.4% for 2023, which they are entitled to under the terms of the collective bargaining agreement. This would have the effect of keeping their salaries in a stagnant state and all future wage increases would have to be calculated on a lower base.
A settlement proposal of this nature requires careful consideration as it could have serious implications for the future of our members. A final decision could not be taken lightly as the stakes could not be higher.
After much deliberation, IMATU members were put to vote, the result of which saw the City’s settlement offer receiving a resounding thumbs down. The majority of our members who participated on the ballot chose to reject the settlement offer as they simply could not be convinced that it constituted a fair and reasonable settlement of the dispute.
Accordingly, on 20 June 2024, IMATU communicated the rejection of the settlement offer to the City of Tshwane. IMATU however remains open to further settlement discussions under the CCMA and we advised the City as such.
Way Forward
The settlement offer having been rejected, the CCMA intervention process has come to an end, as no further meetings have been scheduled. IMATU is now turning its attention to the Labour Court where we will oppose the City of Tshwane’s two Review Applications.
All papers have been filed in both applications and we are now waiting for the Registrar of the Labour Court to assign hearing dates for these matters.
The Next Round of Wage Negotiations
IMATU will commence wage negotiations for the 2024/2025 financial year, in the SALGBC, on 15 July 2024.
Quotes attributable to the General Secretary, Mr. Johan Koen:
“We were of course hopeful that a settlement could be reached in the CCMA’s conciliatory intervention, and we are deeply dismayed that the process didn’t turn out as expected. There is understandable frustration on the part of IMATU members as this is the second year in which they have received no salary increases. Their resilience has been stretched to the limit.
IMATU officials worked hard to resolve this dispute, but in the end, the City’s settlement offer did not win universal support. Our members simply could not be convinced that forfeiting their rights to their salary increases in exchange for an immediate lump sum payment would be in their best interests.
The fact is that the settlement offer simply does not go far enough to alleviate the impact of the cost of living crisis our members are currently experiencing and it would place our members at a distinct disadvantage when it comes to their future salary increases.
It is regrettable that we now have to take this dispute along the adversarial path to the Labour Court. We are however confident of our prospects of success in opposing the City of Tshwane review application. The two SALGBC appointed arbitrators, assisted by independent financial experts, correctly dismissed both of the City’s exemption applications and it is hard to imagine that the Labour Court would come to a different conclusion.
Our members have shown incredible resolve and trust in IMATU to defend their interests in the Labour Court. Our immediate priority is to ensure that the Labour Court assigns hearing dates for the City’s Review Applications as soon as possible.
We would however urge the City of Tshwane to reconsider its position. An adverse judgement in one or both of the City’s Review Applications could result in orders compelling the City to pay both salary increases retrospectively (i.e. the 2021 increase retrospectively to 1 July 2021 and the 2023 increase retrospectively to 1 July 2023). This could have serious financial implications for the City.”