By: Nokhana Moerane Head: Legal & Compliance Ethekwini Municipality. Date: 23 July 2014

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1 PRESENTATION ON: Regulations on the Appointment and conditions of employment of Senior Managers and Upper Limits of salaries for Senior Managers By: Nokhana Moerane Head: Legal & Compliance Ethekwini Municipality Date: 23 July 2014 Developing and Sustaining excellence in local government management 1

2 Presentation Outline 1. Introduction-powers of LG 2. Brief overview of the: Regulations on the Appointment and conditions of employment of Senior Managers [Regulations]; Upper Limits of Total Remuneration Package payable to Municipal managers and managers directly accountable to MM s [Notice] 3. Constitutional Concerns 4. Implementation concerns 5. Conclusion Developing and Sustaining excellence in local government management

3 LG CONSTITUTIONAL POWERS National, Province & Local Government spheres distinctive, interdependent and interrelated [s40(1)] Municipalities have the right to govern on their own initiative the local government affairs of their communities [s151] This right is subject to national and provincial legislation BUT such legislation may not compromise or impede a municipality s right to exercise its powers or perform its functions Developing and Sustaining excellence in local government management 3

4 LG CONSTITUTIONAL POWERS S154 National and provincial government, by legislative and other means to support and strengthen capacity of LG to manage own affairs Section 160: Council may make decisions regarding the exercise of all the powers and the performance of all the functions of the municipality Council may employ personnel that are necessary to perform its functions 4

5 Co- operative Governance (s41) Respect the Constitutional status, powers & functions of government in the other spheres Not assume any power or function other than those conferred in terms of the Constitution Not encroach on the geographical, functional or institutional integrity of government in another sphere Developing and Sustaining excellence in local government management 5

6 Municipal Systems Act Chapter 7 Local Public Administration and Human Resources (Broad/ framework principles) empowers the Council to: Approve a staff establishment; MM s to: Provide job descriptions Attach remuneration and conditions of service to posts Establish a process to review staff establishments, JDs and remuneration 6

7 The Regulations The Minister of Cogta published the Regulations on 17 January The regulations prescribe detailed and onerous processes and procedures (including timelines) for: 7

8 The Regulations Reg 4 - staff establishments Collective agreement obligation to consult labour on the staff establishment is not taken into account in process Reg 7,10 recruitment Internal recruitment policies ignored Council approval for filling of senior manager posts is cumbersome, unnecessary process for an administrative function 8

9 The Regulations Reg 12 Composition of selection panels stipulatedright of Council to delegate eroded. Reg 13 Compiling shortlist Regulations are at variance with Act( power to appoint vested in Council in consultation with the CM) Timeframes prescriptive Reg 15 Process for conducting interviews stipulated 9

10 The Regulations Regulation 35 provides that the Minister must by notice in the gazette determine the upper limit of the total remuneration package of Senior Managers. This must be done before 31March after taking into account a number of factors 10

11 Upper Limits Notice determining the upper limits for the period 1 July 2014 to 30 June 2015 published on 29 March 2014 without any notice, or consultation thereon. Regulation 35 lists items which Minister must take into account in determining remuneration packages- these have not been considered. 11

12 Upper Limits Total remuneration defined as total cost of remuneration including the salary, pension contributions, medical aid, etc Upper limits are applicable to all senior managers appointed as from 1 July and those whose contracts will be renewed or extended after his date 12

13 Upper limits Municipalities are graded based on a formula with the following elements: Total municipal income; Total salary and wage bill Total local government equitable share Upper limits prescribed for MM and S56 Managers whether permanent or on fixed term contracts Upper limits provide for minimum to midpoint; midpoint and midpoint to maximum 13

14 Upper Limits Notice prescribes that market premium allowance can be paid for: Scarcity of skills in local pay market due to geographical location; Scarcity of skills in national pay market (scarce skills) Turn around strategies Network requirements Equity 14

15 Upper Limits Market allowance should not be more than 20% of total annual remuneration To be determined through an assessment of the market; and Approved by Council Waiver Municipalities may in exceptional circumstances, after consultation with MEC apply to Minister for waiver of upper limits 15

16 Upper Limits Application to contain motivation, eg demonstrate that advertisement at prescribed level did not attract any suitable candidates. 16

17 Unconstitutionality of Regulations Prescriptive provides detailed procedures as opposed to guidelines Limit the ability of Local government to exercise its powers Contravene the principles of co-operative Governance Contravenes section 160 of the Constitution Public Service Commission 17

18 Upper Limits Implementation Concerns Application to renewal of existing contracts Conflict with LRA Ability to attract suitable candidates Failure to consider job evaluation in determining packages Failure to consult in terms of the collective bargaining process 18

19 Conclusion Petition Minister to withdraw Regulations and Notice Declare a dispute in terms of the IGR Framework Act Challenge the validity and Constitutionality of the Regulations and Notice 19

20 Developing and Sustaining excellence in local government management END 20