Municipal Managers’ Forum Upper Limits for Senior Manager 10 June 2016

Process The Regulations on the Conditions of Service and the Determination on the Upper Limits of the Salaries of Senior Managers in Local Government authorises the Minister to determine the upper limits of the total remuneration package of senior managers annually by notice in the Gazette before 31 March The Notice for 2016/17 had not been published by the Minister in the Gazette before 31 March as required by the regulations. The steering committee for the drafting of the Notice was initially convened by COGTA on the 6 th October 2015 The first meeting to consider the draft took place way after the regulated date and took place on 8 April First version of the draft was made available at the meeting SALGA at the meeting made inputs on the first draft Draft was then published for comments and a further consultation took place Stakeholders were engaged on 7 and 8 June 2016 to discuss the draft notice

Draft notice Current draft does not provide for a scares skills allowance Notice provides for a rural allowance, based on the CSIR remoteness index Categorisation now determined based on the total municipal income of the municipality, the total population and the equitable share of the municipality 2011 statistics are used for the population, and the data does not provide for the effects of migration in the last 5 years since the census Rationale is that DCOG wants independent verifiable information to be used to determine the categorisation of municipalities 10 categories provided for

Definitions In relation to a municipality, the draft notice define a Senior Manager as a Municipal Manager or acting Municipal Manager appointed in terms of section 54A of the Act, and includes a manager directly accountable to a municipal manager appointed in terms of section 56 of the Act The definition includes ‘managers directly accountable to municipal managers’. This presents a problem in municipalities where there are deputy municipal managers or chief operations officers and where the municipal manager may have delegated powers to either to manage heads of departments or Directorates, therefore COGTA was urged to, in line with the differentiated approach accommodate this prevailing reality so that municipalities are guided on how to apply the provisions of the regulations and Notice in this regard. The regulations do not seem to cater for metropolitan municipalities where the span of control is wide.

Definitions “total municipal income” – it is proposed that the total municipal income for the 2014/15 financial year as reflected in the audited financial statements be used and where municipalities did not submit annual financial statements those for the 2013/14 financial year be used. The phrase “three financial years or more” will result in uncertainty for municipalities about the period to be considered. The use of multi year statements with adjustments is not supported No provision is made where there was a shift in powers and functions between district and local municipality

Definitions Competence: The COGTA national capacity building framework and that of prior years, in its definition of individual capacity refers to competence to mean knowledge, skills and attitude The definition in the regulations and notice differ from this with the result that the behavioural aspects are excluded from the definition Thus a difference between the policy framework and the regulatory framework

Categorisation The notice does not provide for transitional arrangements for the municipalities affected by major restructuring due to the new municipal boundaries. The newly established municipalities will appoint new municipal managers and manager directly accountable to the municipal manager and as such the newly established municipalities would be required to determine the upper limit of the salaries to be paid to such managers. Item 6(1) of the draft notice provides that in the event of the categorisation of a municipality being higher than the previous year, the municipality may only implement the higher categorisation subject to approval by a two-third majority. This provision is unconstitutional as section 160(3) of the Constitution provides that all matters before a Municipal Council excluding matters referred to in 160(2) are decided by a majority of the votes cast

Categorisation At the Stakeholder engagement provinces indicated that they would require an amendment of the 2/3 majority to provide that the concurrence of the MEC needs to be obtained before a higher categorisation be implemented by a municipality A similar provision was included in the first draft discussed on 6 April 2016 SALGA is strongly opposed to this requirement, as neither the Systems Act nor the Regulations provides any authority to the MEC with regard to the determination of salaries of senior managers SALGA further sees this as provincial government encroaching into the internal affairs of the municipality Provinces argues that sect 154 of the Constitution authorises this – even if the Minister / MEC could legislate this, it should be in primary legislation and cannot be introduced in a secondary notice

Offer of Remuneration on Appointment Section 9 (3) provides that an offer less than the upper limits can be made, but in our view it creates a potential for inequities and disparities to creep back into the pay scales and moreover it could also have an unintended effect of flouting the Employment Equity Act regulation on Equal Pay for Work of Equal Value. It was recommended to DCOG that the subsection be deleted

Pay progression SALGA expressed the view that Item 10 should clearly stipulate that a pay progression should be in addition to the cost of living adjustment provided for in 13(4). Provision should also be made for progression across bands, as it is possible that a manager may progress across bands in the total life span of his or her contract of employment The proposed 3.5% should be deleted, as progression needs to be measured against the criteria set out in item 9. Although SALGA supports strict performance management, the original legislation on which the notice is based does not provide for this – the Systems Act and Regulations would need to be amended to allow this Currently the criteria in the notice need to be applied

Transitional Provisions Section 13(4) be revised as follows: The municipal council may adjust the remuneration of senior managers' employed as from 1 July 2014 to 30 June 2016 total remuneration payable by a rate of 6.0% as a cost of living adjustment.

General SALGA expressed its concern that returning municipal managers will be severely prejudiced as new contracts will be subject to the regulations and upper limits and the combination of the new regime applicable with the two sets of competency requirements will impact on the ability to attract skills in the filling of positions, especially in smaller and rural municipalities