The purpose of the virtual meeting was to conclude deliberations on the Municipal Systems Amendment Bill [B2 – 2019] by going through the Bill clause-by-clause in order to finalise the amendment. However, there was disagreement over the desirability of appointing senior managers directly accountable to municipal managers in a permanent capacity, rather than for a fixed term of five years.
The Department of Cooperative Governance said the drawbacks of the fixed term contracts included high turnover and loss of institutional memory, undermined succession planning and investment in ongoing leadership development programmes, it caused institutional instability in municipalities, and had a negative impact on planning and implementation, and invariably led to poor performance and service delivery by the municipalities. The system of permanent contracts would eliminate these problems.
During discussion, it became clear that only the DA agreed with the proposed amendment as it stood. It stated that on balance it was good that senior managers should be appointed permanently and that the fixed-term contracts of municipal managers had to be retained.
Members from the ANC and EFF questioned whether the difference between fixed term and permanent contracts was the only reason for municipalities being dysfunctional, and whether changing this factor would remedy the situation. They expressed concern about the legal implications of the proposed changes, and were also worried about possible unintended consequences. They therefore agreed that the Department should return with details of its consultation process, prior to the Committee embarking on a clause-by-clause deliberation of the proposed amendment.
DCoG on Local Government: Municipal Systems Amendment Bill
Mr Tebogo Motlashuping, Deputy Director General (DDG), Department of Cooperative Governance (DCOG), said the presentation consisted of six parts -- the purpose, the background, challenges with the fixed-term contracts, policy intent of permanent appointments, recommendations and the end.
The purpose of the presentation was to present the motivation for repeal of section 57(7) of the principal Act and to present motivation supporting the appointment of managers directly accountable to municipal managers in a permanent capacity, for noting and consideration by the Portfolio Committee.
He described the background to the proposed amendment.
The Local Government: Municipal Systems Act (2000) [the principal Act] provided a two-tier senior management structure in local government consisting of the municipal managers and managers directly accountable to municipal managers, and for the appointment of municipal managers and managers directly accountable to municipal managers.
Section 56 of the principal Act stipulates that: “(a)A municipal council, after consultation with the municipal manager, appointed a manager directly accountable to municipal managers, and that a person appointed as a manager in terms of paragraph (a), must have the skills and expertise to perform the duties associated with the post….”
Section 57(6) of the principal Act, dealing with employment contracts of municipal managers and managers directly accountable to municipal managers (as amended in 2008), provides that the employment contract of a person to be appointed as a municipal manager must: “(a) be appointed for a fixed term of employment up to a maximum of five years, not exceeding a period ending one year after the election of the next council of the municipality; include a provision for cancellation of the contract, in the case of non-compliance with the employment contract or, where applicable, the performance agreement; stipulate the terms of the renewal of the employment contract, but only by agreement between the parties (the mayor and municipal manager);
Section 57(7) of the principal Act stipulates that:
“A municipality may extend the application of subsection (6) to any manager directly accountable to the municipal manager.”
Challenges with the system of fixed-term contracts:
The system of fixed term contracts -
- Bred high turnover, and caused “brain drainage” on an unprecedented scale;
- Undermined succession planning and investment in ongoing leadership development programmes;
- Discouraged continuity and retention of institutional memory in municipalities;
- Caused institutional instability in municipalities;
- Had a negative impact on planning and implementation, and invariably led to poor performance and service delivery by the municipalities.
- Deprived municipalities of formal handover processes, as councillors and municipal managers vacated office en masse at the end of the tenure of office of councils.
The policy intent of the amendment included:
The system of permanent contracts –
- Would help stem the high turnover of managers directly accountable to municipal managers, and brain drainage;
- Appreciated succession planning and investment in ongoing leadership development programmes;
- Encouraged continuity and retention of institutional memory in municipalities;
- Built the much vaunted institutional stability in municipalities;
- Allowed for a formal handover process to ensure that new councillors and municipal managers were properly briefed.
The Department recommended that the Portfolio Committee note and consider the submission to repeal the universal requirement for a fixed term contract and to replace it with permanent appointments for managers directly accountable to municipal managers in the core business of municipalities.
Members asked whether the Department could empirically prove that making senior managers, accountable to municipal managers, permanent employees of municipalities, would create stability in municipalities. They asked for documentation and minutes recording the consultations the Department had had with all the relevant stakeholders in the local government space. They asked whether the Department had developed policies to deal with the possible fallout when senior managers started to abuse the fact that they were permanently appointed by being insubordinate to municipal managers, who would have fixed-term contracts of five years.
The Acting Chairperson said that it was worth noting that this matter had been dealt with at length on two previous occasions, but he thought there were some outstanding issues and documentation that needed to be forwarded to the Committee.
The Acting Chairperson asked whether the South African Local Government Association (SALGA), represented by Mr Lance Joel, Chief Operating Officer (COO), wanted to comment on the presentation, before the Committee Members started.
Mr Joel replied that SALGA had made a comprehensive submission to the Committee on this matter in previous interactions. It was quite comfortable with what it had presented, as well as the response received, so there were no additional inputs from SALGA.
The Acting Chairperson gave Members the opportunity to ask questions.
Mr C Brink (DA) said two assurances had been given at the previous meeting. The first was that making Section 56 appointees permanent would not have adverse financial implications on municipal coffers. These officials would have their remuneration determined by ministerial regulation, and not by collective agreement. The second assurance that was given was that none of the current Section 56 appointees who were serving fix-term contracts would have their contracts converted, and would automatically become permanent. The incumbents would need to serve the balance of their contracts, and the posts had to be advertised.
There had been a lot of discussion in public sector management circles about permanent vs fixed-term contracts, and this was being debated in SA as well. The benefit of fixed-term contracts was that it was easy to get rid of non-performing officials who earned a lot of money. Given that the Systems Act and regulations prescribed a whole lot of steps that had to be taken, such as really detailed regulations when it came to removing/suspending a senior manager, as well as performance management, this did not make it easy contractually to make the employment position of a senior manager flexible. A lot of that benefit in theory was negated by the fact that it was in any event a highly regulated position, and a contract could not trump what the law prescribed.
Weighing that with the disadvantages of fixed-term contracts, in that there was a high turnover every five years, and the fact that that undermined the establishment of a professional ethic within the municipal service, he thought on balance it was good that senior managers would be appointed permanently and that the fixed-term contracts of municipal managers had to be retained. The DA would be in support of this. He did not like the talk of one public service, because it sounded to him like something that would undermine democratically and separately elected spheres of government, but he understood the points that were being made of municipalities having to attract and retain the same skills that were seen in the rest of the public service. With that qualification, the DA would support the proposal as put forward by CoGTA.
Mr B Luthuli (IFP) said he agreed with what Mr Brink had said, but to him it made no difference. He felt that if the senior managers reporting to the municipal manager were to become permanent, while the municipal manager was on a fixed-term contract, when a new municipal manager started work at a municipality and had to oversee senior managers who had been at that municipality for a long time, it would cause chaos, because the senior managers knew the municipality a lot better and would undermine the municipal manager.
Mr Luthuli asked why councillors hired people who did not have the right skills set for a particular post. The government had said it would be too expensive to teach people the requisite skills. He did not understand why the municipal managers and senior managers reporting to the municipal managers had to be treated differently -- one with a fixed-term contract, and the other as a permanent appointee.
Ms D Direko (ANC) wondered whether the people who formulated this proposal had ever spent time in local government structures. Did they understand the environment local government was operating under? She felt the problem with the department was that when it failed to perform its duties, it came up with a Plan B. The Plan B normally did not provide solutions. Instead, it created more problems than was the case currently. The Department spoke about the handover report. It would not have a proper handover report, because there was a lack of good governance, there were no systems in place, and there was no accountability. Poor performance was caused by the things just mentioned. If there were proper systems in place and municipal officials were accountable and they did what they were expected to do, one would not complain about poor performance, whether the official was permanent or on a fixed-term contract.
What was needed was that there had to be a proper system in place, and that people did what was expected of them. That was why there were performance agreements in municipalities. If the performance agreement was monitored every month, there would not be a problem of poor performance, because everyone had to know, as they expected and got their monthly salary, they also had to deliver on what was expected of them.
Ms Direko said people also had to remember that the municipality was an institution, not anybody’s inheritance. It did not make sense for her to put the municipal manager on a fixed-term contract and then appoint his senior managers permanently. This arrangement would promote challenges and insubordination. She knew this from experience, having worked in municipal structures. This meant that the municipal manager and the chief financial officer (CFO) -- the accounting officers -- would be on contract, while the other senior managers would be permanent. She expected that the senior managers would not cooperate with the accounting officers, and subordination would be the order of the day in municipalities. Would this arrangement help municipalities, or would it worsen a situation which was already critical? Were the DDG’s in the department permanent? If so, did the department see any improvement in performance because the DDG was permanent? If not, why would making the senior managers permanent be advantageous? She did not agree with the proposal from the Department
Ms H Mkhaliphi (EFF) said this was a very complex matter. The Department was saying in its presentation that the Committee had to consider repealing the universal requirement for a fixed-term contract. She agreed with Mr Brink that Section 198 (b) of the Labour Relations Act (LRA) was controversial. When employees took employers to court, different judges had different interpretations of this section, and there was not one consistent interpretation of this section on temporary workers. In principle, the Department was correct in terms of the broader framework, but as Ms Direko was saying, the Department had to consult more widely. She was disturbed when SALGA chose not to comment. This matter needed many different perspectives in order to find a solution. This meeting was supposed to have taken place two weeks previously. The Committee had asked the Parliamentary legal office to come and advise on this matter, because it was very difficult. When she went through the documentation regarding this issue, she discovered that this issue had been canvassed many times before on the different levels of government. In one instance, it had concerned a case in Limpopo province. The same legislation could have different and diverse impacts on each level of government, and therefore it was a complex matter.
The EFF’s position was that it did not want anybody to be exploited by the middle man. It wanted people to have permanent positions, because uncertainty demoralised workers, but at the same time there were challenges. When a municipal manager (MM) was on contract, there were people working under him who had a lot more experience than he had within that municipality. This led to insubordination. Unfortunately, the Department did not expand on this experience. It was dealing with employees of municipalities on a daily basis. This matter was complex.
There had been an issue at a hospital in Durban, where the chief executive officer (CEO) had complained that there was a cleaner he could not get rid of. The cleaner was on crutches and unable to perform her duties, but he could not get rid of her because she was permanent and thus protected by the LRA. Section 57 of the LRA prescribed that in such cases, the employer had to find an alternative job which the worker could perform, instead of firing the worker. Was the Department ready to resolve this type of challenge, when senior managers in municipalities were made permanent and did not perform their duties? The Department was not telling the Committee how it would resolve matters of this type. Also, had the Department consulted the Department of Public Service and Administration (DPSA)? Had it consulted widely enough and looked at all the possible implications of this amendment, and was it confident this was the correct thing to do at this point?
This was why she had wanted the COO of SALGA to give his perspective, because different perspectives were needed. With more ideas on the table, it was possible to compare and weigh up the different ideas and come up with a more balanced decision, but if SALGA declined to comment, what did it mean?
The Acting Chairperson replied that the amendment was actually SALGA’s proposal. The Department had agreed with SALGA and put the proposal forward. SALGA did not have more to add.
Mr H Hoosen (DA) was glad the Acting Chairperson had raised the matter of the origin of the idea. He supported the points that the Acting Chairperson had made. He recalled the previous occasions when the Committee had discussed this particular matter, there had been broad support from all the Members, so he was a little confused by their reactions, unless there had been a change in direction. This matter had come back to the Committee for finalisation, unless it needed further deliberation. The Acting Chairperson was right that SALGA had presented its views on the matter, and the Committee had taken the position that those amendments were important for government to be able to change and turn around some of the situations in many municipalities across the country. He was making this comment to just to remind Members of where the Committee had stood on the matter previously.
The Acting Chairperson said Mr Luthuli had consistently maintained his views on this matter.
The Acting Chairperson said the intention was not to confuse or dilute what had been discussed previously. Section 151 of the Constitution was explicit and clear: The executive and legislative authority of any municipality was vested in its municipal council. If that was the case of the municipal council having executive and legislative authority as enshrined in the Constitution, and also understanding that in the City of Cape Town (CoCT), Section 56 managers were called executive directors, in the school of thought where he came from, when he dealt with strategic management, strategy planning and processes and organisational structure, he was taught that structure always followed the strategy. This meant that one first had the strategy, and then created the structure that would suit the strategy.
The CoCT adopted a new Integrated Development Plan (IDP) every five years. One had instances where the transport portfolio in the next five-year period changed to the transport and urban planning portfolio, meaning that it would incorporate additional expertise which would require not only a person who was qualified and experienced in transport, but also someone who had broader expertise in urban planning and management. Whoever came into power formed a municipal council. They brought with them the different strategies, and they would want to have a structure that would suit their strategy. His question was: If the structure followed the strategy, and the strategy required a reshuffle and new combinations of portfolios as described earlier, what would happen if the permanently appointed executive director had a certain skill set, and the new council changed the portfolios and combinations of portfolios to such a degree that the skill set of the permanently appointed executive director did not coincide with the skill set needed for the new restructured portfolio?
The Acting Chairperson also asked whether this amendment would not intrude on Section 151 of the Constitution, where the executive and legislative authority of municipalities was vested with its council, if they were forced to absorb executive directors appointed by a the council of a previous five-year term.
Mr Joel replied that SALGA had been to this Committee before and had made substantial proposals based on practical experiences, particularly since the 2011 Amendment Act was promulgated. SALGA had consulted extensively, and had picked up the continued challenges its members were facing. He agreed with Ms Direko that the experiences at the local and national levels were not the same. He wanted to indicate why that was the case and illustrate it with practical examples.
It was a fact that every five years there were local government elections, and as a consequence there were changes in individuals being elected. After the last two elections, there had been a big turnover in the election of municipal councillors. There was this five-yearly political leadership change across municipalities. When one looked at the legislative framework, every single new council appointed had the legislative authority to define what it wanted to do within that five-year term, and that was why one had the IDP in municipalities. It was a five-year outlook, and it was reviewed on an annual basis. What one would find in practice also, because the legislation allowed it, was that once that plan had been approved, the council had to have a conversation around whether its administration was appropriately structured to execute that particular plan. So change, including structural change, happened in the administration to align it to the execution of the council’s five-year strategy, and therefore one would also see a change in the administration itself.
Different municipalities differed in implementing their legislative authority. Since the 2011 amendments, some municipalities had elected to appoint senior managers on a contract basis, while other municipalities elected to appoint senior managers on a permanent basis. Some municipalities, where they did contract, were taking a longer-term outlook. He knew that in the Western Cape (WC), most senior managers were contracted for a 10-year period at a time. It was not limited to a five-year period. Some contracts were extended over longer periods, but the point was that there was discretion given to the council to make that appointment on the basis that it deemed fit, but within the framework provided.
As an example, he cited the case of a municipality in the Eastern Cape (EC) which, over the last five years, had clean audits, and the person who had been at the helm of the municipality, the administrative accounting officer, meaning the municipal manager, had been there for almost 20years. So here was the experience of a person leading the institution, and one could see that there had been improvement over time. There was also an example where a person had arrived at the institution two years previously. The municipality had a clean audit and the new manager continued on that path, so there was change at the management level, and one could still see a sustained improvement in that municipality. So, there had been a short space of time, but one still saw clean audits, if one used clean audits as a standard for high performance. Then there was an example of a municipal manager who had arrived two years ago. The municipality had challenges then, and it still had challenges.
The point he was trying to make was that the experiences differed. Could a one-size-fits-all solution be applied? Should it be legislated that all senior managers had to be permanent? Should the five-year minimum contract not be kept as it was, and the rest be left to the discretion of the municipal council, providing that the discretion did not introduce uncertainty over a defined period? The authority had already been given to municipalities to manage their affairs as they deemed fit in executing their mandate.
For him, the middle ground would have been to say: “We are moving towards professionalising the sector. Challenges differ. It may be in our best interests, at this point in time, to continue allowing the discretion, and then we could look at the process over a defined period going forward.” At a later stage, SALGA might reassess and say: “We are we moving towards 100% professionalism within the local government space, and as a consequence, should we not be saying everyone must be permanent within the institution?”
Practice was showing SALGA that the country was not at that point yet. The Department would be able to confirm this. There were people in municipalities who, when the new municipal manager arrived, would say: “Well, this is your senior management team. You find us here and you’ll probably leave us here as well,” and because they were employed on a permanent basis, they had a sense of entitlement. As a consequence of that sense of entitlement, they would also hold the view that “we could make or break you as a senior management team -- and by the way, we have a longer-term contract than you!” He was giving the Committee an alternate view of the realities on the ground. It was not an easy matter.
SALGA wanted certainty on whether a municipality had that discretion or not. SALGA felt it should, at this point in time, be allowed to remain at the discretion of the council to decide on what basis it would want to appoint its senior managers.
The Acting Chairperson said it appeared, based on what the five Members had alluded to, that the majority of the Members, not forgetting what had been discussed in previous Committee meetings, were not in support of the current proposal presented by the Department. SALGA had expressed the same sentiment. This proposal was an ideal for local government in SA, but it appeared that the country was not ready to take that step yet. There had been a case in the CoCT, where an outgoing council had renewed the contract of the municipal manager for a new five-year term just before it left office. The incumbent council had taken the matter to court and the court had reversed that decision, because of the executive and legislative authority being vested in the municipal council.
Mr Motlashuping replied that he first wanted to deal with the general comments, before he came to the specifics in relation to the presentation the Department had made. He wanted to indicate from the outset, that there had been a discussion previously between the Department and SALGA on the matter relating to the Department’s proposal for the permanent employment of managers accountable to senior managers, and the Department was well aware of the position that had been outlined by Mr Joel in relation to what SALGA’s position was. The Department had previously indicated the following – which would also deal with the issues that had been raised by Ms Direko:
When CoGTA conceptualised proposals for the amendment of Bills or Acts, it did further consultation. It did conceptualisation of what it wanted to see happening, took into account the relevant experience in relation to its relationships, and the working relationship it had with municipalities in particular. Senior managers and other staff members in the Department were employed on the basis of their experience in local government. He had been a municipal manager in a number of municipalities, and had been seconded by the Department to a number of municipalities.
It was not true that the Department was sitting in Pretoria and thumb-sucking certain proposals that had been made. The proposals had been made on the basis of the Department’s thorough consultation, and he promised to give specific examples in relation to what happened before the Department proposed these particular amendments. The Department had had several engagements with all the relevant stakeholders, including SALGA and the municipalities. It had been to the municipal managers’ forum, also organised by SALGA, at which the Department had solicited their views in relation to its proposal, especially in relation to this particular proposal. The Department had engagements with all organised formations in the sector and solicited proposals from all of them. It had taken the matter to the Technical Ministers and Members of Executive Council (MINMEC) and also the Political MINMEC, where MECs were represented. The Department presented before the MECs, based on consultations that it had made with all the relevant stakeholders in the sector.
Based on that, the Department had also looked at past experiences where it had met with provinces on a quarterly basis, and the provinces had supported it on this matter. The Committee would have known, when provinces came to present to it, especially the WC, it had vigorously pushed forward this proposal. The proposal did not only contain what the Department thought would be good for the sector, but the Department had consulted extensively. What was presented to the Members were the views of all relevant stakeholders the Department had consulted with.
He had to indicate that when the Department formulated this amendment in 2009/2010, and it was made in 2011, it had proposed the repeal of Section 57.7. In the repeal, that section was dealing with the appointment of managers accountable to municipal managers, to be on a permanent basis. The advice that the Department got from Parliamentary legal services at that time was that the repeal of section 57.7 would result in all other staff members in municipalities being treated the same, in the sense that even managers accountable to senior managers would be treated like any employee of council, and they would then be appointed on a permanent basis. It was along those lines that Parliament at the time had agreed to repeal Section 57.7, which dealt specifically with doing away with the fixed-term contract of managers accountable to municipal managers.
He wanted to bring this into context -- that it was not the decision solely of the Department to abdicate the responsibility to see to it that there was clean governance, but to show it had consulted extensively and also had its background. At the time when the Department took this particular Bill as it was currently to Parliament, Parliament had agreed that the repeal of Section 57.7 would bring stability to municipalities. Those were the general comments he wanted to make, and he wanted to indicate to Members that there was indeed thorough consultation. It was not only the view of the Department alone -- the provinces had been consulted, as well as other relevant stakeholders.
Mr Motlasuping said the Department still stood by what he had indicated to the Committee at the last meeting it had with the Department. He indicated that there would not be any adverse financial implications in relation to this move, because the minister responsible for local government would annually issue a notice which determined salaries for senior managers, and that included managers accountable to municipal managers. The Department saw to it that when the minister so determined salaries, it had to be taken into account that there should not be a further financial burden on municipalities, taking into account the strain that SA had on its national fiscus. When the Minister had been before the Portfolio Committee the previous time, she had made that particular undertaking. All other managers, after this proposal became law, who had been appointed on a contract basis would not automatically be appointed on a permanent basis. The Department said it would put transitional measures in place to deal with the contractual capability of those who were already in the system. So this was not going to be a laissez-faire situation -- that upon this proposal becoming law, there would be any other contractual Section 56 managers who would be automatically made permanent. The Department had stated it would make sure that it would be safeguarded by including the transitional clause in the law.
That issue also addressed Mr Luthuli’s point. The Department had in the previous terms advocated the fact that in instances where there was sub-standard performance and where there were unfair labour practices, and where there were transgressions, DCoG through its Minister had developed regulations for disciplinary processes, as well as to monitor the implementation of disciplinary processes.
The Minister of Finance had also taken into consideration instances of sub-standard performance or unfair labour practice, and issued regulations in relation to transgressions of matters of a financial nature, and the duty of the Department was to see to it that municipalities implemented them. The prerogative of instituting disciplinary measures on the basis of transgressions or sub-standard performance rested with municipalities, and not with the Department. In terms of Sections 154, it had to make sure that there were frameworks and processes which would enable municipalities to perform their duties, and part of this was for the Department to develop regulations.
Regarding the point raised by Mr Luthuli, the Department was saying the fact that managers accountable to municipal managers were employed on a permanent basis, did not preclude the prerogative of municipalities to act in instances where there were transgressions or sub-standard performance.
Secondly, when DCoG issued regulations in relation to the processes that had to be followed when senior managers were employed, it indicated that only people who had the requisite skills and expert competency should be appointed. That was why candidates had to be taken through the competency assessment. Through the competency assessment, the recruiter would realise that certain competencies were lacking in some senior managers, and the importance of this assessment was that once the managers were appointed, municipalities would then start capacity building initiatives to see to it that those identified inadequacies were attended to. The Department had regulations in that regard, and also had processes in terms of having developed batteries of tests to determine the competencies of senior managers. It determined that only those that proved themselves to be eligible and competent by achieving the minimum scores in the tests, would be employed.
There might be instances where there were inadequacies and the capacity-building process was ongoing, but the Department made sure that those senior managers were capacitated. In addition to that, if senior managers still did not perform after being capacitated, there was a legal process in place that would deal with sub-standard performance, and municipalities were encouraged to follow those particular processes.
He responded to Ms Direko and that there had been consultation. MECs, provinces and municipalities had been consulted through formations like the MMs Forum, and on the basis of that, the Department had taken the collective proposal and put it into a proposal as law, and then brought it before Cabinet and subsequently to Parliament. The ideas that went into the proposal did not come solely from the Department.
He agreed with the issue Ms Mkhaliphi had raised. He would not comment on it too much, but he agreed that the fact that the Department argued for senior managers to be employed on a permanent basis did not mean that it promoted sub-standard performance, or the incapacity to perform one’s duties.
The amendment that the Department was proposing was in line with existing labour legislation. For instance, where a person was employed on a permanent or fixed-term contract, the law required that when a person became incapable of performing his/her functions, there were processes to be followed. Local government was subject to the same labour laws that governed the wider labour market. Whatever labour-related matters the Department proposed, the cardinal principle was that the proposal had to be in line with the existing labour laws of the country, and that process did not allow for sub-standard performance or transgression.
Addressing the question by Mr Hadebe, he said the structure of a municipality was the responsibility of the municipal council, after it were been brought up by the municipal manager, and while the structure was still being developed, the municipality would then develop a strategy for the structure to be in a position to implement the strategy. In this particular instance, the Department was saying the strategy would be much better implemented in instances where there was continuity in relation to the people in the structure to implement the strategy.
The Department was mindful of the fact that it might not always be the ideal situation in relation to everyone performing up to standard in bringing the input they had to make in implementing the strategy. However, the drawback was that after every period of five years, the complete turnover of senior managers made it difficult to implement strategies, because there was no institutional memory to continue the implementation of the strategy. The IDP was a long-term strategy. In line with this, it was preferable to have senior managers who had been in the employ of municipalities to successfully implement a strategy based on the structure that had been adopted by the municipalities.
This proposal did not take away any executive authority and function of a council to employ. The only intervention that this law sought to advance was to see to it that the executive authority became sure that when it employed these individuals through the investment it made, the strategy would be in a position to be implemented seamlessly over the years.
In the event that whatever the Department did was a transgression, or intruded on the executive authority of council to employ, the state law advisor would have indicated that the Department’s proposals were not in line with the constitutional imperatives of the country, and as a result this proposed section tampered with the enshrined right of municipalities to exercise their executive authority.
The Department had indicated in the past that this proposal was not the panacea for all the evils that plagued local government in SA, but it thought that through the experiences it had over the years, if this proposal could be made into law, it would minimise the mistakes and the problems that local government had. The Department would from time to time come back to Parliament to make new proposed amendments based on experience in the field to remedy and fine-tune parts of the legislation which governed local government.
Mr Themba Fosi, Acting Director General: COGTA, wanted to add to the points made by Mr Motlashuping and to give context to the points made by Mr Joel. If one looked at the last three local government elections, in 2006 there had been a turnover of 71%, in 2011 78%, and in 2016 77%. These were new councillors, and the impact of this was that it contributed administratively to the removal of senior people in leadership positions at the municipal level. That was the point Mr Motlashuping had been making. For the sake of continuity, it was important to preserve the institutional memory of a municipality. It meant that every five years, municipalities were starting afresh.
From the national context, the Department was encouraging municipalities to start planning long-term. The country had therefore developed a National Development Plan (NDP), and in all the Department’s policies and programmes currently, it was instilling a long-term planning view at a municipal level, and in the context where one had instability or a high turn-over at an administrative level, it became difficult to have a long-term horizon on how one planned. The reality was that up to this point, municipalities mostly planned short-term, while most infrastructure and social programmes, which were meant to improve the conditions for people on the ground, required a long-term view. This was what he wanted to emphasise.
The Acting Chairperson reiterated the question that he had posed in terms of the Committee adopting the proposal of the Department to have senior managers appointed permanently. He asked whether the permanent appointment of senior managers did not intrude on the jurisdiction of the executive authority of the new council when it took office. The new council would find executive directors appointed on a permanent basis already in place, and would be forced to work with them, since they would be permanent.
Ms G Opperman (DA) said she was fresh from working within municipal structures, and was conversant with local government legislation. Was there not already obligation in Section 57.6 (a) whereby a municipal manager had to be employed on a fixed term contract, therefore making it compulsory, and even if Section 57.6(c) was deleted, regarding the discretionary powers of a council, a MM could not expect a fixed-term contract to be renewed, even by agreement. The differentiation between employment contracts of MMs and senior managers were therefore justified in terms of the Departmental objectives of institutional stability. She was satisfied, because the Employment Equity Act (EEA) currently did provide for a difference in terms of conditions of employment between employees of the same employer. If the Department said its Departmental objectives were institutional stability, continuity and retention of institutional memory, then it was safeguarded by Section 57.6 (a), whereby a municipal manager must be employed, thereby making it compulsory for any council.
Ms Direko said in the public sector, the DG was permanent. Mr Motlasuping had said in his presentation that the Department had done a thorough consultation and that its decision was well informed. Even when the decision was taken to make DDGs permanent, she thought the Department of Public Service and Administration had considered it a well-informed decision. She asked whether a good story could be told about CoGTA. Was there a good story about the long-term plan, accountability, improvement and the ability to do the work, or was job security the only positive point that CoGTA could muster on that resolution?
CoGTA had said it had consulted enough relevant stakeholders. Could the documents of those consultations be made available to the Committee so that it could see exactly who had been consulted and how far the consultation process had gone, and which provinces were present at consultation sessions? The Committee would be able to see where the views which were represented in the proposal had come from, and would then be able to discuss with the Department from an informed position. She did not support the proposal.
Mr Luthuli said to him it made no difference. He made an example of a different job -- for instance, the driver of a mayor. When a new mayor came in, the mayor would have his/her own driver and the previous driver would lose his position. An incoming council would want to select and appoint its own team, and having senior managers in permanent positions already would cause conflict. He did not agree with the proposal of the Department, and wanted the situation to stay as it was.
Ms Mkhaliphi said the EFF was advocating for capacity building in the state, and on that basis she found the proposal of the Department progressive. Local government was the first sphere of government, and it had a lot of challenges. She understood where the Department and SALGA was coming from, because they had mentioned that there was a movement towards the professionalisation of municipalities, which she agreed to 100%. Mr Fosi had also emphasised it, but the Committee could not just accept the presentation without interrogating the possible repercussions arising out of this proposal becoming law. She asked the Department to take the Committee into its confidence, and tell it what remedies it had against some of the possible fallout of this policy change. The example given by some Members was when the permanently employed senior manager started to undermine the fixed-term-appointed municipal manager. How was the Department going to counteract this type of situation? How were the Department’s policies going to address those challenges? The Committee was not taking a hostile position towards the Department and its proposal -- it just needed answers on a solution to the possible repercussions the amendment could have.
In South Africa in general, Section 198(b) -- which was an amendment -- was an amendment because it also had some problems when it came to fixed-term contracts. Although the LRA tried to address the issue of fixed-term contracts in South Africa, if one went and studied some of the court cases, it gave one a clear indication that even the judges in labour courts were grappling with how to protect workers on fixed-term contracts. Therefore, if the Department also wanted to address this aspect that the LRA was trying to address, it would be welcomed. However, when it came to the sphere of government that was being dealt with here, she asked that the Department explain how it planned to address the possible fallout issues, which also concerned the Committee.
Ms P Xaba-Ntsaba (ANC) said she did not support the permanent appointment of senior managers. She agreed with Ms Direko ‘s proposal that the documents and records of the Department’s consultation process on this matter had to be made available to the Committee. As Mr Luthuli had said, the council stayed for five years. When the council changed, what would happen to the permanent employees? There were huge problems in municipalities. If all employees in municipalities were permanent, who was going to deliver? Municipal employees were not even delivering currently, while they were on fixed-term contracts. She supported the five-year fixed-term contract, and was against the permanent employment of senior managers.
Mr K Ceza (EFF) said this was a very complex matter, given the fact that he had not been anywhere near municipal spaces, and had no background to it. He wanted to proceed cautiously, but said it looked palatable. When Mr Joel had been talking about a particular municipality in the EC that had a long-serving municipal manager, and had been getting clean audit reports in succession, it looked very palatable. He had then asked himself that if one manager could do it over a period of 20 years, what stopped the others from doing the same.
Would the Department’s proposal change ethical behaviour in municipalities? JS Morocca and OR Tambo municipalities had been assessed to have extremely low work rates. How did the Department plan to transform that particular environment, where municipalities had a poor track record and were repeat offenders?
Currently there were staff members in many municipalities who did not have the requisite skills to perform their functions, but who were employed because of influential connections. How would the proposal address skills development in municipalities?
He agreed with Ms Direko on public participation. He would also like to see the records of the public participation sessions. Was the information in the public domain, and was it accessible to communities, because he was worried about the culture on the ground? He knew that when municipalities called meetings, sometimes they bussed in people who they knew would agree with whatever was said. He was from a community called Steve Tshwete, where this culture existed.
The professionalisation of that space was also palatable, because it spoke to the in-sourcing of people, as Ms Mkhaliphi had called it. The EFF wanted people to be really employed permanently, but one had to look in depth into the possible unintended consequences. What would be the new tensions? The Acting Chairperson had mentioned that every five years, the municipalities had to start afresh. What risks were associated with employing people on contract? What were the conditions of employment for people who were employed permanently? What would be the conditions of employment for the senior managers accountable to the municipal manager? Were the conditions of employment applied in the same way as with other contract workers? If not, what would be the situation in terms of the conditions of employment for senior managers accountable to the MM?
Mr Brink said he thought the principal benefits of the proposal before the Committee, to make senior managers accountable to the municipal manager permanent employees, was that it would make the municipal service an attractive career prospect for professionals. It would promote a professional instead of a political ethic amongst professional engineers, planners, accountants, attorneys -- the people that municipalities needed to stay out of the cycle of electoral politics and focus on the job of building up municipalities that could deliver services.
If there was a practice in SA where people freely moved from positions in the private sector to the public sector and back, then fixed-term contracts would be no problem at all, because one would have a wide pool of expertise available, and one could simply change as the political leadership changed. But that was not the case. In SA, people in the private sector at that level did not apply for jobs in municipalities, not only because many of them saw these jobs as toxic -- as political, and a poisoned chalice for their career -- but also because there were high barriers to entry to serve in senior positions in municipalities. There were certain sector-specific qualifications that one had to have in terms of the Systems Act regulations, for the appointment of senior managers, before one could land a job. One could not just come from Clover or ABSA bank or BMW, and become a director of legal services, for instance, at the City of Tshwane.
The challenge for the government and the country was to build a local government, sector-specific pool of expertise, and that required professionals to start out from middle management and work their way up. Government had to give civil servants, and those in municipalities, a clear career path, because once they jumped out of the public sector, they were unlikely to come back. They would then be lost to the SA people, and the cause of building a capable state. He though the question that was asked, “What was the disadvantage of having fixed-term contracts?” had been quite convincingly answered by the DDG and the chief director that had presented. There was an up to 70% turnover of municipal councillors every five years in most municipalities. That was institutional memory lost. It was essential that the professionals, the people who advised and assisted the politicians to deliver services to the people, had a memory of what went on, where the institution came from and how local government worked. The loss of people every five years was the very definition of instability in local government.
He recounted his own experiences in the City of Tshwane. Colleagues might have known his history there. When he became Member of the Mayoral Committee (MMC) for corporate services in the City of Tshwane, more than 100 people were appointed on fixed-term contracts that all ran out at about the same time. The level of instability, anxiety and sheer chaos that situation created was not good for any organisation, especially not for any political party that wanted to implement its manifesto in government. Of course, that was the problem of deployed cadres of a certain political party, but the truth was, no matter one’s political persuasion, any political party needed the benefit of a professional, permanent civil service if it was to get anything right in government. He said the DA Members of the Committee would be in favour of making these senior managers permanent.
The Acting Chairperson said he thought the different parties in the Committee agreed on wanting to see stability in local government, and also moving towards professionalising local government. However, the dominant view in the Committee was not in support of what the Department was proposing in relation to Section 56. The Committee also noted what SALGA had proposed. SALGA agreed with creating stability and, in the longer term, having permanent Section 56 senior managers, directly accountable to the municipal manager, but in the Committee’s estimation, the country was not ready for that step yet. In SALGA’s view, it would be ideal at this current time to maintain the status quo until such time that the country was ready to move towards the position that was currently proposed.
There never before been a situation in this Committee where the Committee decided on a matter based on voting, and the Acting Chairperson did not want the Committee to go to that extent. There had also been a request for the Committee to get evidence in relation to the public engagements and stakeholder consultation, where this view had been advanced, debated and ultimately agreed upon as a direction towards professionalising local government. This would assist the Committee a great deal. He was not too sure when the information would be made available. He asked the Department to indicate when it would be available.
Mr Motlashuping replied that the information would be available the following Tuesday.
The Acting Chairperson asked whether, in the light of the diverse views still existing on the proposal by the Department, and Members requesting to verify whether or not wider consultation had been undertaken in this regard, the clause-by-clause perusal of the Bill could be postponed.
Mr Hoosen asked whether the Department could also provide the Committee with some sort of historical experience of how the current provisions were affecting municipalities negatively. The presentation had mentioned some examples, but some real life case study examples would be helpful. When this Committee discussed the clause in the Bill which dealt with whether political office bearers should take up senior positions in municipalities, some very good real case examples had come up. Could the Department supply the Committee with similar examples, as it applied to the matter under discussion?
The Acting Chairperson asked the Department whether it could also get a legal opinion on the constitutionality of Section 151, on how the legislative and executive authority of municipal councils would be affected if senior managers in municipalities became permanent employees.
Mr Ceza proposed that the Committee treat the situation with much caution and in detail. It had to be given enough information in order to make informed decisions, because he was new to the Committee and legal issues were very sensitive. The decisions had legal implications which could have unintended consequences, as the Acting Chairperson had mentioned earlier. He asked the Committee to be very patient with regard to this matter.
Ms Mkhaliphi agreed with the other Committee Members on the proposed way forward. She asked the Department to add its new policy perspective to the information it had to bring back to the Committee, should the amendment become law. With the professionalisation of local government, new policies had to be developed to govern the changed local government landscape. The Acting Chairperson had asked about the constitutionality of the change. She asked what the Department’s policy perspective would be after the change. When challenges arose, how would they be addressed?
The Acting Chairperson said he had hoped that the Parliamentary legal advisors and the state law advisors would comment, but he did not see them raising their hands on this matter. Hopefully, the next time they would give some input.
Ms F Muthambi (ANC) said she had joined the meeting at 19h30, but could not speak because she was still driving. She had listened to the discussion and agreed with what the speakers had said, but the point that she wanted to emphasise was that this issue came about only after a consultation with Limpopo, that senior managers had to be made permanent. Her issue for when the Department reported back to the Committee was that she needed to be convinced that the failures of municipalities were based only on the fact that senior managers were not permanently employed, in line with what SALGA and the Department had presented.
Her second issue was that there was a high turn-over of DGs in national government, and she wanted the Department to do an analysis on this phenomenon.
She had experienced firsthand in municipal structures the attitudes of permanently appointed staff towards contracted management staff. They would say, “These ones come and go.” It happened at the municipal level and at the national level. There was an attitude of “DGs come and go.” What made the Department think that making senior managers reporting to municipal managers permanent would create stability? She was not yet convinced. The Department had to provide evidence and facts.
During a previous meeting, she had asked the state law advisor for a legal opinion on the legality and constitutionality of making senior managers accounting to the municipal manager permanent, while leaving the municipal manager to be appointed on a fixed-term contract. Currently these were all fixed-term contract positions. These were issues she needed answers to. She also disagreed with appointing senior managers accountable to the municipal manager on a permanent basis, as she did not believe that it would create stability in local government.
The Acting Chairperson said he had discomfort with the issue of institutional memory, as if one was working alone. Also, living in a technologically advanced world, where information could be stored and be available at one’s disposal, it did not mean when the leader was not present everything would collapse. When senior managers went on sick leave for two months, projects in municipalities did not come to a standstill. Executive directors were not at work all day throughout the year -- they took leave and aluta continua, because there was a structure within municipalities. They worked with teams of experts.
He reiterated Ms Muthambi’s request that the Department report back to the Committee with empirical, scientific evidence on whether or not the challenges that municipalities had would be resolved by making the managers accountable to municipal managers, permanent.
The meeting was adjourned.
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