The unprecedented five-year wage agreement for local government workers has been hailed as a historic achievement in both the local government sector and broader public service.
The South African Local Government Association (SALGA) announced on Monday that it had reached a five-year wage agreement with organised labour represented at the South African Local Government Bargaining Council (SALGBC).
The agreement includes a 6% salary increase for the current financial year (2024/25), with 4.5% effective from July 1, 2024, and a further 1.5% coming into effect from March 1, 2025.
Salary increases for the next two financial years would be set at Consumer Price Inflation (CPI) plus 0.75%, while the final two years of the agreement would see hikes of CPI plus 1.25%.
SALGA, which represents 257 municipalities across South Africa, said the agreement took into account the challenging economic environment, characterised by high inflation and constrained fiscal resources.
It comes into effect from July 1, 2024, and runs through to June 30, 2029.
“SALGA was mandated by municipalities to negotiate a balanced salary and wage agreement that reflects current economic pressures, particularly in light of several municipalities facing financial distress,” the association said in a statement.
“As part of the agreement, SALGA also introduced a revamped exemption process, using a set of financial distress indicators from the National Treasury to assist struggling municipalities.”
The 2022 State of Local Government Finances report found that 169 South African municipalities were in financial distress.
The City of Cape Town has previously warned that the proposed five-year wage increases for local government workers from 2024 was simply not affordable and would lead to a budget shortfall of R2.06 billion for that province alone.
“The shortfall is not sustainable for the City, which has today rejected the facilitator’s proposal, recommending to SALGA that the proposal for years two to five must rather be linked to CPI with no additional percentage increases,” the City of Cape Town said in late August.
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