The City of Johannesburg says it is financially stable enough to afford the terms of a R10.3bn salary agreement with municipal workers for the next three years.
However, the DA has opposed the deal and is taking the matter to court, arguing it places an unsustainable burden on the city’s budget and threatens essential service delivery.
While the city said the agreement was approved by the council in 2024, it acknowledged that the total cost has not yet been incorporated into the budget, as it is still under consideration.
Spokesperson Nthatisi Modingoane said: “The salary redress report [containing the amount owed to city employees] was approved by council in 2024. The amount owed has not been appropriated in the budget yet and is being processed for consideration by council in the pending budget adjustment process.”
Modingoane added that the city is aware of the DA’s legal challenge but had not yet received the court papers.
The DA is not opposed to inflation-based increases...[but] this decision is fiscally reckless and irresponsible
— Belinda Kayser-Echeozonjoku, DA Joburg caucus leader
Belinda Kayser-Echeozonjoku, DA Joburg caucus leader, said the city has chosen to prioritise an unaffordable wage agreement over restoring basic services.
“Instead of directing limited resources toward fixing pipes, repairing substations, maintaining roads and restoring law and order, the administration is committing the city to a R10bn agreement it cannot fund. The DA is not opposed to inflation-based increases ... [but] this decision is fiscally reckless and irresponsible,” she said.
Kayser-Echeozonjoku said any salary adjustment needed to be budgeted for and aligned with the city’s financial reality.
“That money could and should be used for infrastructure maintenance and basic service delivery. The city cannot plead poverty when it comes to infrastructure maintenance, yet it suddenly finds R10bn for an unfunded wage agreement. This contradiction exposes an administration that has lost its priorities,” she said.
The legal action by the DA, as revealed in a letter from law firm Minde Schapiro & Smith to the mayor and city manager, outlines three key aims: to prevent the “unlawful” implementation of the unfunded R10bn agreement, to compel full transparency about the increment’s financial implications and to protect essential service delivery budgets from being diverted.
According to the letter, the payment structure outlined in the agreement would require a tranchement approach: by March 2026, a payment of between R1.2bn and a maximum of R2bn would need to be made; by July 2026, a further payment of between R5bn and R6bn would be required, followed by another tranche by July 2027.
“These sums are extraordinary and entirely disproportionate to the city’s current fiscal capacity. The city’s own documents confirm that these payments would necessitate severe austerity measures such as a citywide halt on new staff recruitment, encouraging early retirement and aggressively recouping debts from provincial and national government within just a few months,” the letter said.
Lebogang Ndawo, Joburg region chairperson of Samwu, the municipal workers union, said the union was confused by the DA’s “sudden stance”. Samwu is the biggest union in the city.
“This problem of salary increments has been in discussions since 2020, but now that it’s adjusting the budget and we’re adjusting salaries, it’s an issue,” Ndawo said.
“For three financial years, this thing has been going to council and has been passed by council. Why not?
“If you are paid correctly, you are also motivated to do the work, but one must understand that workers are working in a city where everything is expensive and they earn below the margins to even be able to afford the city they work in. So if the salaries are adjusted, it would improve the lives of the families and their livelihood,” he said.
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