REPORT ON THE IMPLEMENTATION OF THE LOCAL GOVERNMENT: REGULATIONS ON APPOINTMENT AND CONDITIONS OF EMPLOYMENT OF SENIOR MANAGERS, 2014 PORTFOLIO COMMITTEE ON COGTA 9 JUNE 2015 1

CONTENT INTRODUCTION AND BACKGROUND OVER ARCHING ISSUES ON THE REGULATIONS COMMENTS ON THE PROPOSED UPPER LIMITS NOTICE

INTRODUCTION & BACKGROUND The Local Government: Regulations on the Appointment and Conditions of Employment of Senior Managers were gazetted on 17 January 2014; The same regulation enjoins the Minister to annually determine the upper limit of total remuneration package of senior managers taking into account several factors outlined therein. The first Notice came into effect on the 29 March 2014, for the 2014/2015 financial year, as required by Regulation 35 of the above mentioned regulations. A workshop was held with municipalities to assess the implications of the implementation of the regulations.

INTRODUCTION & BACKGROUND A SALGA position paper was compiled talking to the above mentioned regulations and the 2014/15 Notice after several consultations with members, the SALGA NEC as well as provincial and national Municipal Managers Forum; The position paper was also submitted to the Minister of COGTA, appealing to the Minister to consider matters raised in effecting the Notice for the year 2015/16; On about 28 April 2015, through its Chairperson, SALGA was requested to comment on a draft Notice for the financial year 2015/16 not later than 14 May 2015;

Overarching Issues regarding the Regulations and the Notice There are five broad issues of strategic and policy significance municipalities have raised and these are: The balance between the need to address institutional and administrative issues in local government and the protection of the constitutional integrity of this sphere of government; The need to professionalize municipal administrations and the instruments being used to achieve that objective; The relationship between regulation and the notion of differentiation; The relationship between regulations and Public Administration Management Act processes; The nature and extent of the use of regulations and Notice for local government; (application & interpretations)

FOUR MAIN AREAS OF CONCERN 1. Over-regulations in terms of the conditions of service 2. Process issues 3. The upper limits for salaries 4. Duplications of competency requirements

Over-regulations in terms of the conditions of service The conditions of service of MMS and senior managers are highly regulated and leave no room for implementation decisions for the municipality It is the contention of SALGA that the conditions of service should be prescribed, but the implementation to be left to the discretions of the municipality, such as the pro rata calculation of leave All these matters can be addressed through municipal policies This also relates to the Constitutional integrity of municipalities to determine its own internal processes

Process issues Process issues The recruitment and selection process is heavily process orientated, and lead to implementation challenges Establishment of a Selection Panel: MM to chair panel which includes councillors- tensions with political principles Shortlisting process : full panel or chair in consultation with panel? Role of the Executive Mayor / Executive Committee in the process, as not directly involved, yet Executive Mayor / Mayor needs to submit the report – accountability?

Upper limits of salaries for MMs and Senior Managers Upper limits has lead to serious challenges for the professionalisation of local government Both the current notice as well as the proposed new notice have the following unintended consequences: There are two categorisations for employees, one for MMs and senior manager and one (TASK) for bargaining officials Middle managers evaluated i.t.o. TASK earns more than the upper limits Less capacitated municipalities with low income have extremely low salary levels, thus acting as a deterrent to prospective employees Low category municipalities fail to attract qualified and capacitated managers as required in law, and AG report showed the relationship between vacant senior positions and lack of performance in municipalities

Upper limits of salaries for MMs and Senior Managers Cont. Process required to motivate market premium is long and expensive for less capacitated municipalities Salary levels for especially smaller municipalities does not take into account the legal obligations and accountability of MMs and senior managers – some MMs earning as much or less as deputy-directors in the public service Minister reluctant to grant exemptions There is no clear direction on how the person “moves” to the midpoint or maximum package Proposed new notice: Proposes a three year fixed categorisation before increases can be considered Salary scales still biased against smaller municipalities

Competency Framework Structure 6 LC (which has 20 driving competencies) 6 CC LEADING COMPETENCIES (LC) Strategic Direction and Leadership Impact and Influence Institutional Performance Management Strategic Planning and Management Organisational Awareness People Management Human Capital Planning and Development Diversity Management Employee Relations Management Negotiation and Dispute Management Program and Project Management Program and Project Planning and Implementation Service Delivery Management Program and Project Monitoring and Evaluation Financial Management Budget Planning and Execution Financial Strategy and Delivery Financial Reporting and Monitoring Change Leadership Change Vision and Strategy Process Design and Improvement Change Impact Monitoring and Evaluation Governance Leadership Policy Formulation Risk and Compliance Management Cooperative Governance CORE COMPETENCIES (CC) Moral Competence Planning and Organising Analysis and Innovation Knowledge and Information Management Communication Results and Quality Focus Four (4) achievement levels that act as benchmark: Basic Competent Advanced Superior

? Assessment Landscape Assessment Houses CM Competency Library Level 5 Level 4 Level 3 Level 2 Level 1 P Works Dev& T Planning Financial Serv. CS Assessment Houses CM ? Competency Library Battery Mix? Cost Integrity Predictability Consistency Integrated Reporting Professional compliance

Competency requirements Regulations to be read with National Treasury minimum competencies for MM and all sr managers, other than CEO No recognition of prior learning provided for in NT minimum competencies A single set of competencies will ease implementation of competency requirements, as one to be tested upon selection and the other requiring the completions of units standards, while no indication on how the two sets of requirements interrelate

COMPETENCY ASSESSMENT Clause 16 deals with the requirements for the application of competency testing in the selection process while also providing that municipalities can apply for funds from the Local Government SETA to fund these tests. Managers required certainty on whether the SETA can indeed fund such and also how the cycles of funding by the SETA can impact on the selection processes. SETAs release funds at particular periods given their funding calendars and this may not always coincide with municipal recruitment processes. SALGA has conceptualized a competency assessment model, whose implementation is subject to application for funding submitted to the LGSETA.

Selection The requirements for the application of competency testing in the selection process and provides that the competency assessment instrument must― (a) be capable of being applied fairly; and (b) not be biased against any person or group of persons Section 8 of the Employment Equity Act states that: Psychological testing and other similar forms of competency assessment of an employee are prohibited unless the test or assessment being used – Has been scientifically shown to be valid and reliable Can be applied fairly to all employees and Is not biased against any employee or group of persons.

HUMAN RESOURCE PLANNING Clause requires council to assess the human resources necessary to perform its functions, with particular reference to – the number of senior managers required; and the competencies which a senior manager must have; Assess existing human resources by race, gender and disability and department with reference to their: competences; training needs; and employment capacities, The challenge in this regard is that most municipalities have no PMS in place. Where it exist is only applicable to Senior Managers. SALGA requested funding from LGSETA to intensify its support to members in this regard. SALGA is implementing the TASK job evaluation programme to ensure jobs are correctly graded.

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