ActionSA criticises City of Johannesburg over R10.3bn wage deal with SAMWU

What happened

Earlier this year the City of Johannesburg reached a wage agreement with the South African Municipal Workers’ Union (SAMWU) that will increase salaries across the board over the next two years. National Treasury sent a letter to Johannesburg Mayor Dada Morero saying the increases are “unsustainable” and has directed the municipality to stop implementing the agreement.

Treasury’s warnings and legal challenge

In its letter, National Treasury said the city’s current financial state makes the obligation impossible to fulfil and that the deal violates the Municipal Finance Management Act (MFMA). The Democratic Alliance in Johannesburg is challenging the wage agreement in court.

ActionSA response

ActionSA Gauteng spokesperson Mongezi Ntsebenzo said the Treasury letter confirms the party’s long-standing warnings about the city’s financial crisis and called for urgent action to protect workers and residents.

“The situation is clear (that) the crisis has not been resolved and urgent action is needed to protect both workers and residents. ActionSA’s position is clear, workers must be treated fairly, but the city must not make promises it cannot keep.”

Where things stand

According to the information in the Treasury letter, the municipality faces a significant funding gap if it proceeds with the pay increases. Treasury has instructed the city to halt implementation while the matter is addressed.

Next steps

The DA has launched a court challenge to the agreement. The city’s response to Treasury and further developments in the legal process will determine whether the wage increases proceed.