Trade unions attach municipality assets over outstanding pay and benefits

Written by Ciaran Ryan. Posted in Journalism

Nelson Mandela Bay Municipality says it wants its trucks back and will settle the bill, while government steps in to save Kopanong’s assets being auctioned by municipal workers union. From Moneyweb.

Port Elizabeth. Image: Shutterstock
Port Elizabeth. Image: Shutterstock

The Democratic Municipal and Allied Workers Union of South Africa (Demawusa) last week attached assets belonging to the Nelson Mandela Bay municipality over an outstanding R8.8 million in pay owed to 36 workers.

The outstanding payment dates back to 2015 for the workers who were insourced immediately after the Labour Relations Act amendments, which require temporary workers to be permanently placed after three months.

The assets attached include a fleet of trucks as well as other vehicles. The loss of these vehicles would be devastating for the Nelson Mandela Bay municipality and its already crippled service delivery.

The 36 workers were employed in a call centre operated by the municipality, but had been short-paid since 2015, according to Demawusa coordinator, Siphiwo Ndunyana. “Most of these workers started as early as 2009 but were deemed to be permanently employed from 2015,” he said.

A dispute was declared in 2019 and was referred to arbitration, resulting in the workers being granted backpay of R8.8 million which had to be paid by December 15, 2020.

“The municipality ignored this legally binding award and did not pay the workers. As a fighting union, we are taking this to its logical conclusion. We do not want municipalities to smile at the expense of workers,” says Ndunyana.

The union called a halt to the auction as it says the municipality had agreed to settle the outstanding payments within a few days.

Nelson Mandela Bay municipality is in a stand-off with National Treasury, which has withheld R1.6 billion in conditional grant funding from the city, because of its failure to elect a mayor and a properly qualified municipal manager. Last week Eastern Cape DA leader Nqaba Bhanga was elected mayor, after two years in ANC hands. The city burned through 10 municipal managers in those two years. Bhanga blamed the ANC for breakdown in service delivery and promised to return order and good governance to the city.

A similar dispute to that in Nelson Mandela Bay was playing out in the Free State this week, when South African Municipal Workers’ Union (Samwu) was ordered to halt the auction of assets belonging to the Kopanong municipality. In 2017, the union secured a high court to attach the municipality’s assets to recover more than R58 million in unpaid pension fund contributions. SABC reports that the auctioning of the assets was halted after government obtained a stay of execution, arguing that the planned auction did not follow proper procedures. Kopanong has been mired in controversy for years for failing to pay its bills, prompting the DA to call for the dissolution of the municipality.

This is not the first time a municipality’s assets have been attached as a way of collecting outstanding debts.

Last year Eskom attached 139 farms worth R2.5 billion from Matjhabeng municipality in the Free State for unpaid electricity bills, and also went after furniture, cars and other equipment in settlement of a R2.3 billion arrears bill owed by Emfuleni municipality, south of Johannesburg. The utility also went after the bank accounts of Maluti-a-Phofung municipality in the Free State in pursuit of an outstanding bill of R5.3 billion, but later agreed to release some funds to allow it to pay salaries and other costs.

Dysfunctional municipalities that have been run into the ground are facing revolt across the country. In the next instalment we’ll look at some parts of the country where residents have had enough and are taking matters into their own hands.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.