Outcome of Exemption Application: Newcastle Municipality vs IMATU and another

The Newcastle Municipality’s application for exemption from the salary and wage collective agreement for the 2023/2024 financial year has been dismissed.

The arbitrator has ruled in IMATU’s favour.

The arbitrator held that the municipality was already aware, at the time the agreement was concluded in 2021, that it was in financial dire straits. It cannot therefore claim that its financial situation was unforeseen or unexpected. The municipality moreover implemented the agreement for the previous two years, without objection, despite its financial difficulties.

The arbitrator further held that the municipality is required to show good cause in order to be exempted from the salary and wage agreement. This municipality would therefore have to prove that it has taken, to the best of its ability, the necessary steps to address its hardships. The municipality failed to apply for relief from National Treasury’s ESKOM municipal debt relief support programme and therefore perpetuated its own financial crisis. The municipality moreover failed to provide proof that it has implemented other cost reduction measures such as reduced spending on overtime and consultants.

The arbitrator advised the municipality to reduce its operating expenditure by reducing its dependency on consultants, investing in skilling its employees, hiring competent staff, dealing with poor performance and misconduct, and cutting waste and inefficiency. The municipality also still has the option of applying for debt relief.

Finally, the arbitrator stated that the purpose of the salary and wage agreement was to improve the conditions of service for employees, and fairness dictates that the employees’ economic and living conditions should also be taken into account. The arbitrator also stressed the need for compliance with Constitutional values and ideals, and that state organs should lead by example.

Accordingly, the municipality’s exemption application was dismissed.

This is the second hearing on the Newcastle Municipality’s exemption application. The application was previously dismissed because it was not properly authorised by a resolution of its municipal council.

This is last of the three exemption applications opposed by IMATU for the 2023/2024 financial year. All exemption applications have therefore been dismissed.

Viva IMATU Viva!!!