May 2000

FEDUSA and its affiliate, IMATU, who is directly involved in the Municipal sector supports the restructuring of Local Government. We want to applaud the Government on the initiative to revamp the whole sector and to look at all aspects of its functioning afresh.

Viewed holistically, the Bill is acceptable and is supported. However, there are certain aspects of grave concern in the Bill.

FEDUSA and its affiliate, IMATU, is grateful for the opportunity to address the Portfolio Committee and know that time constraints do not allow us to comment on all aspects. We would therefore concentrate on the most important aspects of concern to us.

Chapter 1

Clause (ii) - FEDUSA welcomes the inclusion of labour in the definition of community. This will ensure the involvement of labour in all decision making by the Council.

Clause (xiv) - This definition does not specifically refer to Bargaining Council agreements, Although it refers to collective agreements we request that specific reference is made to a Bargaining Council agreements, thereby recognising the existence and importance of the South African Local Government Bargaining Council (SALGBC).

FEDUSA fails to understand the reason for this exclusion. In practice the Executive Committee is where most of the deliberations take place and final recommendations and decisions for ratification are formulated.

We therefore request that Labour, having a direct need to have knowledge of the reasoning underpinning a decision, be allowed to be present during the meeting.

The term "functional or business units", is not defined. It is essential that it is properly defined to indicate in which way these units, especially the business unit, would be functioning.

Although we understand the reasons underpinning these provisions, FEDUSA and IMATU are concerned about the negative impact this provision might have on the existing Town Clerks/CEO’s and the existing managers who are directly accountable to the CEO. As the section stands, it is a prescriptive clause and not an enabling clause. This will mean in practice that all existing Town Clerks and/or the next level of employees will be forced to be appointed on a contract of not longer than 7 years. This impacts directly on their job security and places their continued employment in jeopardy.

We are further concerned that this section ignores the financial implication in respect of non appointment of the employees or refusal to be appointed on a contractual basis by the employees, on a Municipality.

In this regard we refer to the various redundancy provisions in existence in Municipal Pension and Retirement Funds.

FEDUSA proposes that the wording agreed to at NEDLAC be accepted. If accepted it will have the effect that, the clause will not only be an enabling clause, but a clause that also forces the Municipality to apply its mind to all aspects, both negative and positive, before making a decision.

The wording suggested is contained in the NEDLAC report to Parliament.

Section 52(4)

This provision is already contained in Section 52(1) and can therefore be scrapped.

FEDUSA and IMATU fail to understand the logic behind this provision and are concerned about the impact it will have on the privacy of the individuals concerned. If the reason for this can be explained, it might influence the position of FEDUSA and IMATU on this section.

As it stands at this stage, we fear that it might be unconstitutional.

The meaning and practical implementation of this clause is questionable.

What does the word "evaluate" mean? What will the benchmarks or norms be that will be used to evaluate? Why also is it necessary to "evaluate" this?

The same can be said for the word "review" in the sentence. "Review", for what purpose? Does "review" imply that the remuneration and conditions of service can be unilaterally changed or amended by the Municipal Manager?

We firmly believe that such a practice would be an unfair labour practice and be unconstitutional.

It would further undermine the collective bargaining process and the authority of the SALGBC.

Once again we are cautious about what this section means in practice. Is it meant to be systems to implement Bargaining Council Agreements? If it is not meant in that way, does this section therefore imply that each Municipality can develop it’s own, resulting in no uniformity.

If Section 62(2) is meant to ensure adherence to the Bargaining Council Agreements, we contend that the section should be reworded to more expressly stipulate just that.

The reference to representative union should be clarified, in the definition clauses, to refer to those unions that are acknowledged to be representative in terms of the Constitution of the South African Local Government Bargaining Council.

FEDUSA understands the concern that seems to underpin this section but are extremely concerned about the negative impact this will have in practice.

The reasons for this is that there is a Bargaining Council in existence. All the main role players in the sector are represented on this Council e.g. SALGA, SAMWU and IMATU.

The function of the Bargaining Council is to regulate the relations between the parties and to regulate all human resource aspects, such as job evaluation, remuneration, conditions of service and all other personnel aspects.

We therefore cannot agree to this clause and want to reiterate our concern in respect of this clause.

We believe that the Minister should only have this power to intervene, once the Bargaining Council has failed to deliver and only after the Minister has placed the Bargaining Council on terms to perform and it failed in this respect.

However, what is more disturbing is Section 66 (f) and (g) Again, we fail to understand the rasionale behind this. This is a self regulating industry, both in respect of the retirement and the medical aid sector. There is adequate legislation in place to safeguard all role players and their interest. In addition the Trustees are burdened with a fiduciary duty. Why then, is it necessary for these clauses?

We firmly believe that it would be unconstitutional for the Minister to intervene and for instance interfere with the freedom of association, as is contemplated in sub section (f).

We also believe that it would cause major labour unrest and interfere with existing rights, should the determination by the Minister in terms of sub section (g) result in a decrease in existing contribution rates.

These powers of interference in an industry, that has been performing well on its own in the past and which is there to provide for the employees’ old age and also to prevent the person from becoming a burden on the State. These aspects can best be regulated by the forums created to manage this. The legislation in existence is also comprehensive and more than adequate.

It is therefore requested that sub clause (g) and (f) be removed from the section.

We are concerned that over emphasis is placed on under performance which in any case are adequate covered by the provisions of the Labour Relations Act.

We are of the opinion that provision for additional compensation should also be looked at for those employees that perform above average. But again, this aspect is part of the collective agreements that can be entered into, under the auspices of the Bargaining Council and should therefore not form part of this legislation.

In general FEDUSA wants to request that formal status be given to the established, Sectoral Forum, in terms of the National Framework Aagreement, in this chapter. A specific clause should be inserted to that effect.

Further, that a section, stipulating the role and involvement of labour in the whole process, be inserted.

The draft white paper on MSP’s spells out the process of involving labour but chapter 8 is silent on Labour’s involvement.

FEDUSA also believes that it should not only be a consultation process with Labour but a proper negotiating process, catering for a dispute resolution mechanisms as well.

Councils should not be able to decide on this restructuring unilaterally but should only be free to restructure once Labour agrees, either by consensus or through arbitration.

This clause just lists the various options available and fail to focus on the agreed to principle contained in the National Framework Agreement, that the public service delivery option is the preferred option.

We believe that this clause should be reworded to reflect just that.

The Municipality must at all times remain the service authority and retain the final approval right. This cannot be given to the service provider.

The provider may only recommend not have final decision making authority.

The transfer of staff should only take place with the concurrence of the employees concerned.

See the wording of Section 75(2)(b) in this regard.

This clause is open to abuse and it may result in the exclusion of better providers.

Two providers can in terms of this sub-section be chosen at random.

There should be more safeguards inserted or the clause should be reworded so as to ensure that the best potential providers are solicited.

It is unclear as to who can prescribe this. Clarity should be given.

Transfer or secondment of employees should be on the understanding that their movement should adhere to the "equal or better" provision, in respect of the remuneration and conditions of service of the effected employees.

The existing contract of employment should at least be the same.

An additional sub clause (4) should be inserted to enable the Minister to regulate and enforce. We suggest the wording: "The Minister may stipulate specific performance or prescribe certain actions to be taken or remedies to be effected, to address the problem."

The word "authorised" should be inserted before the word "official" so as to ensure that the official that signs is duly authorised.

No indication of the monetary amount of the fine is given. A maximum amount is suggested.

FEDUSA and IMATU strongly oppose this clause, as it seeks to impose an additional burden on municipal employees. Municipal employees do not enjoy special privileges, nor a special dispensation in terms of the Constitution, why then do they have to be treated differently than other rate payers? This clause should be scrapped.

Enforcement of payment should be the same as for any other rate payer.

FEDUSA and IMATU wish to thank the Portfolio Committee for the opportunity to address it on this very important Bill.

We do hope and pray, that our comments and suggestions will be taken seriously and be afforded the necessary consideration. The above comments and suggestions reflect our concerns and if accepted will, to our mind, ensure the effective delivery of service to the community and will further ensure that labour peace continue in the sector.

FEDUSA and IMATU want to impress upon this Committee that the comments and suggestions are made with the best intentions and the interest of Local Government at heart.

We thank you.

Parliamentary submission