The recent decision by the Amathole district municipality council to “please” striking employees by approving their long-awaited salary increases has come back to haunt the broke municipality.
Finance minister Enoch Godongwana has ordered the provincial government to approach the courts to have the resolution, made on October 13, reversed.
Godongwana recently wrote to premier Oscar Mabuyane “advising” him to urgently approach the courts so the salary increases, the result of a “questionable council resolution”, could be set aside.
In a letter dated December 8, Godongwana said the increases were approved by the council while the ADM was under intervention and struggling to find its feet financially.
ADM, which is so broke it sometimes fails to pay staff salaries, had been placed under intervention by the provincial and national government after it failed to honour its financial obligations.
Godongwana told Mabuyane: “The proposed salary increases are based on the incorrect salary scale and grading” and should be reversed.
Numerous attempts on Thursday to get comment from Godongwana failed, but Mabuyane confirmed receipt of the minister’s correspondence, saying it was receiving attention.
In August, it was reported that the newly elected ADM political leadership’s plans to implement long-standing salary increases had been nixed by the provincial Treasury, which advised the municipality that its plans were not affordable.
The new ADM troika in the municipality — mayor Anele Ntsangani, council speaker Onke Mgunculu and chief whip Nanziwe Rulashe — had met protesting employees and agreed to implement the 6.25% salary increase.
This was despite warnings by municipal administrators that the increases had not been budgeted for and the council could not afford them.
Provincial Treasury spokesperson Pumelele Godongwana said at the time: “We had advised against the salary increases considering the municipality has been adopting an unfunded budget for the past five years, including the 2022/2023 financial year, where employee-related costs are one of the major drivers.”
The intervention, instituted in January 2021, forced the local authority to implement a financial recovery plan that would lead to financial sustainability.
Intervention is a less dramatic step than placing a municipality under administration and involves seconding officials to the local authority to assist it.
Several years ago, the municipality increased its pay grading to category 7, which meant it could pay higher salaries.
Despite being ordered by the Makhanda high court in August 2021 to reduce its grading to category 6, it still has not done so.
In his letter to Mabuyane, Godongwana wrote: “It is therefore critical to emphasise that the proposed salary increases are based on the incorrect salary scale and grading, worsening the current unfavourable financial situation, and incessant failure to provide essential services at the expected standard ...
“I trust that you will favourably consider the proposal to seek urgent relief from the appropriate court of law with a view to enforce compliance with the applicable statutory prescripts and the implementation of the imposed financial recovery plan.”
On Thursday, Mabuyane said the provincial government was handling the matter, and that “we will soon be correcting what was done wrongly”.
It was likely that the province would go to court to reverse the council resolution.
Mabuyane said the salary increases “arose out of a wrong grading” and that the province would rectify the situation.
On Thursday, mayor Ntsangani said they were confident that their decision to increase salaries had been taken in the best interest of the ailing municipality.
“I am not aware of the minister’s letter, but I must say that we widely consulted before taking such a decision, which [has] since brought stability back to our municipality.
“Remember, employees were on an ongoing strike action and nothing could be done in this municipality, including submitting financial statements.
“If we had not taken to the decision, things would not have returned to normal.
“I just do not understand the minister’s tone in this, but we took the decision to save this municipality from total collapse.”
Ntsangani said the increases had increased the municipality’s monthly salary bill from R55m to R58m.
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