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The Amathole district municipality says it will not be able to pay its monthly salary bill of R65 million for four months. (Supplied)
- More than 1,600 workers from the Amathole District Municipality will not receive wages for four months.
- The municipal management said that the workers did notIt will not be paid for February, April, May and June.
- ThThe South African Municipal Workers Union has rejected the wage freeze and is calling for the municipal director to be fired.
The municipality of the cash-strapped Amathole district in the Eastern Cape says it will not pay salaries to its 1,670 employees for four months due to “limited financial resources.”
This was contained in a circular, which was drafted by city manager Thandekile Mnyimba, to all employees, councilors and traditional leaders on the municipality’s payroll.
Mnyimba said the workers would not be paid for February, April, May and June and recommended that they consult their creditors.
Equitable participation
Amathole district municipality spokeswoman Nonceba Madikizela-Vuso confirmed that the municipality could not afford to pay the R65 million monthly salary bill.
According to Madikizela-Vuso, workers will receive their March salaries when the municipality receives its fair share from the National Treasury. However, the money will not be enough to cover other months.
Mnyimba said that one of the reasons for the financial crisis was low revenue collection. The municipality only collected 25% of revenue in the first two quarters of fiscal year 2020/21.
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Madikizela-Vuso also revealed that the municipality was heavily in debt and owed R322m providers.
The South African Municipal Workers Union (Samwu) rejects the wage freeze and calls for the dismissal of Mnyimba and the municipality administration.
Among the reasons for the high wage bill was the fact that the municipality was “illegally” categorized as a Grade 7 authority, rather than a Grade 6, with district authority workers’ wages unfairly on par with those. who worked for a subway.
“The municipality has constantly highlighted that the root causes of the municipality being technically bankrupt, among other things, is the high wage bill as a result of benefits and the illegal recategorization of the municipality from Category 6 to Category 7 and standardization” Madikizela said. Vuso.
Staff withdrawals
Madikizela-Vuso said the municipality requested money from the Eastern Cape provincial government to pay the four months’ wages.
The municipality is also considering instituting voluntary cuts, targeting 33% of its complement of staff.
“In addition to the application, there is an amount of 150 million rand earmarked for what the municipality calls a ‘mutual separation package’ in which employees will have the opportunity to apply to separate from the municipality. This targets 33% of middle management employees [level], where the cost of employment is too high, “said Madikizela-Vuso.
The municipality’s plan to review employee benefit policies in an effort to curb spending was intercepted by the Labor Court, Madikizela-Vuso said.
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The municipality, which has offices in East London, has been under siege by labor action by its workers.
One of the most notable strikes was a costly six-week protest over a wage dispute that cost the district authority 19 million rand after protesters destroyed infrastructure.
For the past two years, the municipality has relied on bank overdrafts to pay wages, Mnyimba said, adding that it was a costly exercise and unsustainable in the long term.
Mnyimba has also listed the drought mitigation measures as an expense that contributed to the municipality’s financial crisis.
Samwu Provincial Secretary Lona Ludidi said that mismanagement, financial mismanagement, outsourcing and privatization of work in the municipality, as well as fruitless and wasteful spending, had caused the financial crisis.
As an example of unsuccessful spending, an incident was cited in which ADM hosted an end-of-year function in December 2019 for councilors. The bill for alcohol and food amounted to R60,000.
“In addition, for consecutive years, the Auditor General’s report always pointed to millions of rand not being accounted for,” Ludidi added.
Ludidi criticized Mnyimba for allegedly not first informing unions about his plans to freeze wages.
“Our boss was supposed to call us to a labor forum platform and present their plans and make us trust the situation so that we could make a contribution and involve them. We are not surprised by this move because our boss has always been hostile towards unions. and refusing to recognize us. We expected this treatment from him. “
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