Ratepayers to fork out R1.6 billion for years-old Tshwane salary increases

The South African Local Government Bargaining Council has recently ruled that the City of Tshwane must award backdated salary increases to city officials, amounting to R1.6 billion.

The council found that the City did not qualify for exemption from paying the salary increases in 2021/2022, as the DA-led government had stated at the time that it could not afford them.

In the 2021 to 2022 financial year, the amount, equal to a 3.5% salary increase, amounted to R489 million. Today it falls somewhere between R1.4 billion and R1.6 billion.

The council found at the recent hearing that the city “deliberately and intentionally” failed to allocate funds for the 2021/2022 salary increase in its budget. 

The argument of affordability was disputed on the grounds that the city failed to plan for and prioritise the salary increases, and took the option of exemption for granted. 

“We do not believe that the Applicant’s liquidity challenges, which led to not budgeting for the salary increase, warrant an exemption from paying the salary increase,” the council said. 

The commissioner who made the judgment admitted that the financial implications of awarding the backdated payments will be “very huge,” and as such, gave the city 6 months to come up with the money. 

Tshwane Deputy Mayor, Finance MMC and ANC member Eugene Modise, said that the city would implement the decision to pay back the increases. 

The Democratic Alliance has criticised this, arguing that the council’s decision is “seriously flawed and must be taken on review to the labour court,” according to Tshwane mayoral candidate Cilliers Brink.

“If not, the decision will be paid for by residents in the form of deteriorating service delivery and infrastructure,” DA Tshwane’s financial spokesperson, Jaqui Uys, said. 

The ActionSA-led government has criticised the DA for using the financial blow to campaign for mayor, when the DA is responsible for the mess, having led the Tshwane government in the 2021/2022 financial year. 

ActionSA National Chairperson Michael Beaumont said that the DA-led government at the time vigorously avoided paying the increases. 

DA, ActionSA point fingers

“During its involvement in coalitions led by the Democratic Alliance since 2021, ActionSA continually raised concern about the approach taken by DA Mayors in the City of Tshwane in relation to negotiated wage agreements,” Beaumont said. 

The party said that it raised the risk of having to pay the salary increases back if they were not honoured or renegotiated. 

Beaumont added that these concerns came crashing down on Tshwane and its residents when the ruling was handed down. 

“This comes as yet another inherited legacy of eight years of failed DA governance in the City of Tshwane that continues to burden our capital even after the departure of previous Mayors,” he said. 

“The DA has sought to campaign on this latest crisis of its own making as it continues a campaign of ambulance-chasing in a desperate attempt to deflect from the reality that it drove our capital city into the ground.”

However, the DA vehemently denies this. The DA’s Uys argued that the DA-led government saved R600 million at the time the salary increases were due, owing to the exemption.

This allowed the city to reach a favourable arrangement with Eskom.

The party argues that the latest judgment is flawed and must be taken to the labour court for review, not accepted.

“The reasons provided for the award lack the most elementary assessment of whether the City is actually able to afford a R1,4 billion expenditure in the next six months.”

Addressing the claims that Brink is using the financial issue that his party caused to campaign for mayor, Brink’s spokesperson, Kuhle Ngcamane, told Newsday that the ANC is to blame for the issue, as the majority party and the deputy mayor.

“ActionSA has been reduced to fronting for ANC capture of Tshwane,” he said. “This has benefited ANC cadres, tenderpreneurs and union bosses, not ordinary residents.”

Ngcamane added that agreeing to pay back the salaries will further send the city into a financial crisis, as it already ended the 2024/2025 financial year with a R857 million deficit.

He said that ActionSA’s mayor Nasiphi Moya tried to cover up the funding crisis with the Tshwane cleaning levy, which was set aside in the Gauteng High Court this week. 

He added that agreeing to pay back the money instead of taking the matter to the labour court may result in the city defaulting on its Eskom payment plan, and threatens Tshwane’s credit outlook.