Local Government: Municipal Systems Amendment Bill [B22-2010]: deliberations with Deputy Minister

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Cooperative Governance and Traditional Affairs

21 February 2011
Chairperson: Mr L Tsenoli (ANC)
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Meeting Summary

The Department of Cooperative Governance and Traditional Affairs, the Office of the Chief State Law Advisor, the South African Local Government Association and the Community Law Centre discussed amendments to the Local Government: Municipal Systems Amendment Bill [B22-2010] with the Committee.

Issues raised by the Department of Cooperative Governance and Traditional Affairs included: wording of the heading in Clause 6; addition of a comma after 'proceedings' followed by the words: 'which record must be made available to Municipalities as prescribed' after Subsection 57 A (9); the mandate of the Municipality about staff dismissal; Municipal staff systems and procedures; and the Minister’s power to regulate Human Resource management systems and insertion of that Section into a new Subsection 72 (2) A.

The South African Local Government Association questioned whether a time frame should be attached regarding Section 57 of the Principal Act: Clause 5 (1) iii (b) where 'the Employment Contract must be signed by both parties before commencement of service'. Another issue was that in line 42 on page 5, (4C) the word ‘guidelines’ should be omitted, as guidelines would first have to be adopted by Council before they could be regarded as binding.

The Chief State Law Advisor explained t
he disadvantages of having ‘30 days’ before signing the Employment Contract. The Performance Agreement involved complex debate but issues pertaining to the Municipal Manager’s job description and salary in the Employment Contract were absolutely clear and had to be settled before appointment. A further issue raised was the Municipal Council case of Mr Manana and the impact of the Constitutional power given to the Executive Authority of the Municipal Council in terms of Section 151. Municipal Managers were obliged to implement decisions taken by the Council unless those decisions were set aside by court.

The Community Law Centre was concerned that the words of the court ‘acting on behalf of Council’ may be confusing and lead to misinterpretation by people in Local Government in terms of the Municipal Manager’s role in appointment of employees and decisions on promotions.


Meeting report

Deliberations on Local Government: Municipal Systems Amendment Bill [B22-2010]
The Chairperson said while the Committee deliberated on the proposed Amendments to the Local Government: Municipal Systems Amendment Bill, the Department of Cooperative Governance and Traditional Affairs (COGTA) was encouraged to raise any outstanding issues of concern. The State Law Advisor (SLA) and Community Law Centre (CLC) would also present on the Manana Court decision.

Clause 6
Mr Jackey Maepa, Senior Manager: COGTA, said that based on recommendations by the Committee and SALGA and on reflection of the proposed amendments, COGTA had amended the Clause 6 heading to read:  'Employment of dismissed staff and record of disciplinary proceedings' because the content discussed thereafter dealt with those particular issues. Subclauses 6, 7, 8 and 9 dealt with the mandates of the Municipality about staff dismissal for misconduct and were open for further input by the Law Advisors.

Mr Fanie Louw, Executive Manager: COGTA said that after recommendation from SALGA, Clause 6 after Subsection 57A (9) should include a comma after 'proceedings' followed by the words: 'which record must be made available to Municipalities as prescribed'.

Clause 10
This clause dealt with mandating arrangements. Based on the deliberations the previous week, Section 71 B of the original Bill would be split into two - organised local government had to consult with the Minister before embarking on any negotiations with parties in the bargaining Council established for Municipalities (Section 71 of the Principal Act) and the issue related to giving the Minister the power to regulate Human Resource management systems, as proposed by SALGA the previous week, had been billed under Section 72.

Clause 7
Mr Louw said another proposal for consideration by the Committee was of the Bill itself to move Section 59 A, which dealt with regulation. Since Section 72 dealt with the principal of regulatory powers of the Minister, COGTA recommended that the Section be inserted into Section 72, as a new Subsection 72(2) A.

Clause 11
Mr Jackey Maepa referred to line 17, saying the substituted sub-paragraph would include the Municipal staff systems and procedures referred to in Section 67(1) of the Principal Act and the matters would include: (aa) transfers; and (bb) termination of service.

Mr Johan Mettler, Executive Director: Governance; South African Local Government Association (SALGA) said that while all the proposed amendments were accepted, SALGA wished to raise a small issue about Section 57 of the Principal Act: Clause 5 (1) iii (b) where 'the Employment Contract must be signed by both parties before commencement of service'. SALGA questioned whether a time frame should be attached whereby the Employment Contract would be signed and the individual's services would be implemented within 30 days.

Mr Yunus Carrim, Deputy Minister: COGTA, said that the Performance Agreement and Employment Contract had been discussed after the previous meeting and that COGTA did have concerns about the contract.

Mr Maepa said that the issue was that the current system allowed for Municipal Managers to be appointed without an Employment Contract for as long as 5 years. The problem arose when a particular Municipality wanted to implement disciplinary action against the particular individual who had not signed an Employment Contract. COGTA thought to coin into the Bill a period of time whereby a person deemed suitable for the Municipal job should have sufficient time to give notice at their current employment and negotiate around the Employment Contract before signing it. The Employment Contract was not as complex as the Performance Agreement. Furthermore, when an Employment Contract was not signed, the problem of Municipal Managers not signing Performance Agreements in terms of the Municipal Performance Act 2006 escalated. This also affected the second chain of Managers down the line.
 
Members agreed that a contract signed within 30 days was acceptable for making provision and negotiating issues before signing and commencing with the first day of work.

Mr Maepa said that since the introduction of Local Government in 2000, Municipal Managers were required to negotiate their conditions of service such as salaries and health packages and this had opened up opportunities for Municipal Managers to maximise benefits and compare remuneration with other Municipalities and so forth.

Mr Mohammed Bhabha; COGTA Advisor, said that sometimes there were delays in negotiations and it was necessary to allow some flexibility for the necessary negotiation to take place, such as how to reduce the tax burden and what the motor and medical aid benefits were.

Ms D Nlhengethwa (ANC) asked for clarity on how to ensure that there was not a conflict of interest between signing the contract and giving notice at the previous place of employment.

 Mr Bhabha replied that this was an issue which required further engagement with COGTA and thereafter would be discussed with the Committee.

Mr Enver Daniels, Chief State Law Advisor, said that it was important that the Municipal Council and Manager were absolutely clear on the Municipal Manager’s job description and salary before the Manager was appointed. A disadvantage of having thirty days before signing the Employment Contract was that the time could be spent simply negotiating new issues of the contract and still the contract may not be finalised. Another disadvantage was that appointing a Manager before conditions of service were clear gave the employee the upper hand in terms of manipulating conditions of service. This was a policy decision which the Committee had to make through guidance from the COGTA. The State Law Advisors believed that the contract was coherent, logical and rational and in the interest of good governance that the contract be signed before commencement of duties.

Mr Daniels added that the Performance Agreement, which could involve complex debate, did take time but this did not detract from the fact that conditions of service laid down in the Employment Contract indicated to the Manager and Council exactly what was expected of him or her immediately the day that they assume their duties.

The Chairperson said that in the earlier motivations, he misunderstood that the 30 day space would give Council the opportunity to abort the employment of the individual if their demands were unreasonable and unacceptable.

Mr Daniels clarified that by giving a person the opportunity to delay the signing to longer than 30 days, that person may hold the Council to ransom without being appointed. Issues had to be settled before appointment.

Mr Maepa added that the Employment Contract not only spelled out the key municipal responsibilities but offered the legal basis for acceptance of employment.

The Chairperson summarised that the 30 days were not required for signing of the Employment Contract but allowed for debate on performance issues. The processes before appointment included verification that the person complied with the requirements as advertised and according to legislation. Once the person accepted the offer, they signed the Employment Contract.

Mr Brutus Malada, Senior Researcher: Office of the Deputy Minister, added that there could be negotiations about the Municipal Manager’s Performance Agreement, but a person could not earn a salary without a contract. In this way, the Draft Bill sought to professionalise the Human Resources in Municipalities.

Mr Mettler said that the second issue SALGA had with the Amendment Bill was that in line 42 on page 5, (4C) the word ‘guidelines’ should be omitted, as guidelines would first have to be adopted by Council before they could be regarded as binding.

Mr Carrim said that guidelines were softer than regulations and would perhaps be useful in terms of approaching the performance contracts of the various municipalities.

Mr Bhabha said the differentiation between guidelines and regulations could be made if necessary and therefore guidelines could be omitted.

The Chairperson said guidelines were not binding and could be omitted.

Ms Yolande Van Aswegen, Principal State Law Advisor: Office of the Chief State Law Advisor, summarised the thrust of the Municipal Council case of Mr Manana. She said that this case was an exceptional matter which did not ordinarily occur within Municipalities. Mr Manana was supposed to be promoted and receive numeration in accordance with the resolution taken by the Municipal Council. The acting Municipal Manager had found some irregularities in the resolution and then wished to withdraw the resolution. Even though Section 55 gave the Municipal Manager the statutory power to appoint an employee, the court ruled that the resolution should have been implemented as it was taken as part of the Constitutional power given to the Executive Authority of the Municipal Council in terms of Section 151. The court also made it clear that where the Municipal Council could not perform all their daily tasks, some of their functions could be delegated, according to Section 59 of Municipal Systems Act. The conclusion of the court case was that the outcome had no impact on amendments in the Bill.

Mr Daniels added that simply put, the court stated that Municipal Managers were obliged to implement decisions taken by the Council unless those decisions were set aside by court.

Mr Jaap de Visser, Associate Professor, Coordinator: Local Government Project: Community Law Centre said that the judgment was the only way to deal with the circumstances, but it did not answer the question about the Supreme Court comment which referred to Section 55 1 (e). The provision in the Systems Act stated that the Municipal Manager was responsible and accountable for the appointment of staff. The Supreme Court of Appeal stated that the provision did nothing but authorise the Municipal Manager to act on behalf of the Municipal Council. The issue of ‘acting on behalf of Council’ was confusing. The Council approved policy and staff establishment, could delegate authority to office bearers and staff, monitor and exercise oversight, implement policies and request information from each department. However, it was important that the Bill was clear on the provision that the Municipal Manager appointed employees and decided on promotions.

The Chairperson asked how the Constitution expressed the authority to appoint.

Mr de Visser replied that the Constitution left it to Parliament to regulate the exercise of the Executive authority by the Council.

Mr Daniels said when the Municipal Manager made an appointment it was on behalf of Council, and thus was implementing the policy and function assigned to her in terms of Section 59. While there was no cause for concern, in terms of ambiguity becoming a problem, there was nothing wrong with clarifying and amending it.

Mr Bhabha said the simple question was whether the court decision impacted on the role of the Executive and political arm of the Municipality.

Mr Carrim said that he could not see the practical value of the input made by the CLC and nor value to amending the Systems Act. It was not a ‘red flag’ issue.

The Chairperson said that the question was whether to clarify the confusion created by the court through its use of ‘on behalf of’ and whether it warranted an amendment.

Mr Daniels said that if it was ambiguous, the Committee may want to make amendment to remove the ambiguity. However, the SLA did not find it necessary.

The Chairperson said that if both the CLC and SLA agreed that the substance did not affect the issue of the day, the concerns would be noted, and the meeting would proceed.

Mr de Visser said that it was not about separation of powers but about anti-corruption. It took place mainly in two areas, procurement and staff appointment. The judgment did not unsettle the theory of local government but the concern was whether local government people would interpret it incorrectly. He was concerned that the Bill should have a clear signal to avoid misinterpretation.

The Chairperson disagreed. He said that corrupt officials did not care about the law and were corrupt in spite of legislation being in place. The objective of fighting corruption must be done through relentless campaigning by many institutions and COGTA’s mandate was to monitor Municipalities optimally.

Mr Carrim said suggested that the Committee may want to consider the value of a report on the discussions of the current meeting.

The Chairperson agreed that reports were a good account of the processes on how the Committee arrived at decisions on amendments and were also used for reflection. The Committee would continue to reflect on amendments until programming indicated timing on a decision for the Bill. 

The meeting was adjourned.


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