The South African Local Government Association (Salga) and organised labour have concluded a third round of salary and wage negotiations, with the facilitators’ proposal of a 6% wage increase for the first year of the agreement now on the table.

The parties will now consider the proposed 6% increase, along with the facilitators' proposal for a five-year agreement.

“The proposal aims to provide for salary and wage adjustments across the board in the context of the realities of high inflation, a constrained economy and limited fiscal resources,” Salga says.

Parties must submit their response to the proposal by September 2. If they endorse the proposed salary and wage agreement, it will come into operation with effect from July 1, this year, and remain in force until June 30, 2029.

This will be the first-ever salary and wage agreement spanning a five-year period that has been obtained in the history of the bargaining council and will go a long way in ensuring the much-needed labour stability in the sector, Salga says.

“Salga’s approach to these negotiations is also premised on the productivity levels of municipalities, linking salary increases to service delivery.”

On the issue of productivity, the facilitators’ proposal states that parties at the negotiation table "recognise that wage increase adjustments strive to reinforce, encourage and promote optimal municipal performance to ensure a higher level of productivity.

"Therefore, this salary and wage adjustments collective agreement must be seen to attract and retain scarce and critical skills to help municipalities maintain financial sustainability and viability," the wage proposal notes.

Meanwhile, given the challenging economic climate and shrinking municipal revenue, Salga had been mandated to negotiate a feasible salary and wage agreement.

Part of this was to introduce a revamped exemption procedure to assist financially-distressed municipalities to apply to be exempted from the wage deal, it adds.

The proposed collective salary and wage agreement will see a 6% increase in the first year of the agreement, with 4.5% effective from July 1, 2024, and an additional 1.5% from March 1, 2025.

There will be increases of 0.75% plus consumer price inflation for the second and third years, with increases of 1.25% plus consumer price inflation for the fourth and fifth years, Salga says.