Outcome of Exemption Application: Cederberg Municipality v IMATU and another (Case No: EX/HQ072201)

The arbitrator has ruled in IMATU’s favour and has dismissed the Cederberg Municipality’s exemption application from the salary and wage collective agreement for the 2022/2023 financial year.

The arbitrator found that whereas the municipality has financial challenges, the municipality has chosen to honour a number of other financial commitments and is seeking to use exemptions as a first port of call as part of its cost cutting measures. The municipality agreed to repay an ESKOM debt at 2.5% higher than the prime rate and other expenditure such as contracted services, consultant fees and other unfunded mandates were not properly motivated. The municipality simply chose not to budget for the wage increase and could not establish that it had no other option but to do so. If the municipality applied its austerity measures fairly to other line items, enhanced its revenue collection and re-prioritised its budget, it would be able to afford the wage increase.

The Cederberg Municipalityis therefore required to implement the wage increase in full for the 2022/2023 financial year.

At this stage, this is the only formal exemption application received by the SALGBC for the 2022/2023 financial year. The Newcastle Municipality has not paid wage increases for the 2022/2023 financial year, but did not file an application for exemption. The SALGBC has issued a compliance order against the municipality and a date for a compliance order arbitration hearing is awaited.

We will keep members informed.