If employees at the Chris Hani Development Agency (CHDA) were to die or be involved in an accident today, none of them would receive medical and insurance coverage.
This is because the funder of the agency, the Chris Hani District Municipality (CHDM), has failed to pay employees’ benefits since the current financial year started in July.
Workers have now seen their critical insurance benefits suspended due to non-payment by the municipality.
This was confirmed in a suspension notice issued to workers by a retirement and insurance management company.
The notice, dated November 4, revealed that the employees’ monthly contributions had not been paid as from July 31, leading to a suspension.
The letter informed the workers that risk benefits, such as death and disability cover, had ceased from the suspension date.
It said if a member should die or become disabled, the fund would not be able to pay any risk benefits as the policy premiums were not paid and the policies had lapsed.
“In these circumstances the employer may be in breach of promises made in the employment contract and, if so, any claim that arises during this period may result in a claim against the employer,” the letter said.
It is about four years we have not been receiving salary increments while the parent municipality is giving our institution these increments, and the bargaining council has also issued a compliance order, but nothing has been implemented.
— Development agency workers
The insurance company told the employees non-payment of contributions was a criminal offence.
“Should all the outstanding contributions not be paid we will notify the Directorate of Public Prosecutions and the Registrar of Pension Funds.
“We may also be compelled to bring charges against the employer and/or the directors in their personal capacities.”
The workers were further advised that their representatives, the unions, should engage with the municipality and help facilitate the payment of the arrear contributions.
“If the arrear contributions are made it is possible that the fund can be reinstated without any significant effect on benefits.
“If no further payments are made your sub fund will be liquidated. This process may take six months to a year,” the letter read.
A worker, who did not want to be named, said on Friday that this has put their lives at risk.
“We are working without any medical aid and no assurances, we are at risk and we don’t know what they are fighting about that is really affecting us.
“We have been fighting this for too long, others have even left. This has become really stressful,” the worker said.
Another worker said there had been no indication from either the agency or the municipality about the contribution benefits.
“We have inquired about this many times ... and now this puts our lives at risk.”
This has forced them to approach premier Oscar Mabuyane for urgent intervention.
The workers, in a letter addressed to Mabuyane, say they have “reached all other avenues”, seeking a resolution on salary delays, increments, unpaid medical aid and staff provident fund contributions, and leadership squabbles between the agency and the district municipality.
They say they have been receiving their salaries late without explanation.
They have also not received salary increments despite a compliance order by the bargaining council.
The agreement was for a 4.5% increase as well as a 4.5% increase in their home-owners allowance and a 5.4% increase in the employer medical aid contribution.
“It is about four years we have not been receiving salary increments while the parent municipality is giving our institution these increments, and the bargaining council has also issued a compliance order, but nothing has been implemented,” the workers said.
Recently, the agency was dealt a heavy blow when three members of its six-person board resigned, which meant it had lost its quorum.
This included the resignation of its former deputy chair, Tshililo Ramabulana, who cited leadership issues for his departure.
His resignation came after the agency’s CFO, Flicker Tiso, had notified its members in August that it was implementing cost-cutting measures due to “significant” cashflow problems as a result of the municipality not paying the agency’s first quarter grant allocations for the 2025/2026 financial year.
Some of the measures included;
• All project managers with casual workers were informed that no payments would be made to casual workers until further notice;
• Overtime payments have been put on hold;
• All fleet requests were put on hold, as the agency engaged banks to reduce the fuel limit on fleet cards; and
• All offices were instructed to switch off lights and aircons after 4pm.
Tiso, in the letter, said the agency had an electricity bill of R18,000 a month having fallen behind with the Enoch Mgijima Local Municipality and were at risk of being cut off.
The agency had also limited the staff’s telephone usage to 10 minutes.
Tiso said the agency had a R19,000 monthly telephone usage bill, with some employees said to be spending 54 minutes on calls.
Some of the measures, according to the source, had limited the agency’s ability to carry out its duties.
Responding to this on Sunday, Chris Hani municipal manager Gcobani Mashiyi said they were working to resolve challenges confronting the development agency to ensure its stability.
Mashiyi said the district municipal council, in a recent sitting, had taken a resolution to appoint an interim board of directors and a chair.
“This is critical for stability and governance that will facilitate oversight and accountability on the operations of the agency,” he said.
The first special interim board meeting sat at the weekend, with an audit report tabled and board configuration committees discussed.
Induction is expected for January 2026.
Mashiyi said the municipality had also been consistent in providing financial support to ensure employee salaries were paid, with salary increments due to be finalised in the upcoming board meeting in January.
Daily Dispatch
