COCT 6.25% Wage hike:We have no choice

COCT 6.25% Wage hike: “We have no choice” - Neilson

In response to the first article posted on this subject, Ald. Neilson shed some light on our concerns.

“The City does not have free rein to decide on staff salary increases. These are decided at the national Local Government Bargaining Forum. We wish it was not so, but because it is the law, we are obliged to implement the increases, which are part of a 3-year agreement. There is no “black swan” clause. Councils can apply for exemption, but the City of Cape Town is in too good a financial position to qualify for an exemption.

The City is working together with other Western Cape municipalities through SALGA Western Cape to the SALGA NEC to reopen negotiations with the Unions to try and reach agreement on reviewing the agreed upon salary increases and that SALGA National should apply for exemption from the salary increases on behalf of all Municipalities.

You state that there is no “black swan” as the City is in too good a financial position to qualify for an exemption. Then you switch to SALGA WC to reopen negotiations for all municipalities? The clause in the agreement does not refer to any entity being individual or otherwise, it merely refers to “unexpected economic hardship”. Surely you must agree that the pandemic fulfils this definition? Though COCT may be in good financial position, the ratepayers certainly are not.

Amongst other measures, the City has frozen vacancies, cut overtime and promotions. We continue to seek ways to cut costs given the uncertainties that we all now face.

You also state that COCT froze vacancies. In the April FMR, a total employee count of 29,254 (including Councilors but excluding vacancies). The budget reflects a total of 33,077. This is 13% over April 2020. A year-to-year increase of 8.9% in costs over the previous year is projected.

Apart from the cost of living increase, information included in the Budget 2020/21 showing figures of approximately 30% to 50% increases for some EDs must be explained. This pertains to income adjusted within the pay scale allowed and compares a six month year to a full 12 month term. This is as three new EDs were appointed. For instance, the Urban Management ED in the 2019/20 year only received six months’ remuneration. So six months is being compared with one year. That is why there is a 53% increase for this ED. The increase shown is not the salary increase but the cost to the City to cover the remuneration.

With reference to the ED salary increases (see table below). The post for ED: Urban Management was filled during the 2019/20 budget. However, remuneration from two other ED’s were sacrificially adjusted to accommodate the new position. These “sacrifices” were re-aligned with the other ED’s during the 2020/21 budget, hence the 30% increases. Either the figures in 2019/20 are wrong, or the 2020/21 are incorrect. The end increase table remains a true reflection as per both budgets.

Cape Town’s rates and tariff increases are the lowest for all Metros in the country”

I agree that the percentage tariff increases were lower than the other metros, but it always remain in question “Percentage of what?” A 4% on R100 and 8% on R50 equates into the same result. As per the budget table SA14, Cape Town remains the most expensive City for both the Middle Income and Affordable household groups

Finally, the MPC has in May (prior to the budget being presented to Council) projected, during the pandemic, the CPI to fall further to 3.4% for 2020. Thus, at 6.25%, is 84% above CPI. Do you sincerely believe that it is still in line?

Originally Published by Mike Heyns | Smart Compact 

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