Local Government: Municipal Systems Amendment Bill: deliberations

Meeting report

Contracts for Municipal Managers: Legal opinion

The instruction given to Adv Yolande van Aswegen, The Office of the Chief State Advisor:  Department of Justice and Constitutional Development (DoJ and CD) was whether there was constitutionality and fairness in making managers reporting to municipal managers permanent while municipal managers remained on fixed term contracts, and the extent to which the proposed clause on permanent contracts was in harmony with section 151(2) of the constitution.

Providing a brief background on the opinion, Ms Van Aswegen said that during the stakeholder engagement process on the Bill in the Committee, the Limpopo Provincial Department of Cooperative Governance, Human Settlements and Traditional Affairs had commented on clause 6(1)(f) of the Bill, which proposed the deletion of section 57(7) of the principal Act. According to the Limpopo Province, managers directly accountable to municipal managers should be appointed on a permanent basis.

During deliberations on the Bill, the Department had subsequently agreed that the deletion of section 57(7), as proposed in clause 6(1)(f), must be retained, but proposed that a specific provision be inserted in clause 6(1), to provide for the addition of a new section 57(7A) in the principal Act, which should be drafted along the following lines:

 “(7A) The employment contract for a manager directly accountable to a municipal manager must be on a permanent basis.”

The proposed new section 57(7A) had resulted in a number of questions from the Committee about the legal implications of the provisions of section 57(6)(a) of the principal Act, which provides that the employment contract for a municipal manager must be for a fixed term of employment ,up to a maximum of five years, not exceeding a period ending one year after the election of the next council of the municipality, whilst the proposed new clause 6(1)(h), which proposes the insertion of a new section 57(7A) into the principal Act, would specifically provide for the employment contract of a manager directly accountable to a municipal manager, to be on a permanent basis.

On the constitutionality and fairness of making managers reporting to municipal managers permanent, while municipal managers remained on fixed term contracts, it was stated that although the Amendment Act had lapsed on 9 March 2019, it was important to note that all the other provisions of the principal Act, including any amendments and regulations or policies made or issued prior to the 2011 amendment, remained operative and were still enforceable. Section 57 of the principal Act dealt with employment contracts for municipal managers and managers directly accountable to municipal managers. Without the amendments proposed in the Bill, the principal Act provided that both a municipal manager and a manager directly accountable to a municipal manager may be appointed in those positions only in terms of a written employment contract with the municipality, and subject to a separate performance agreement that must be concluded within a reasonable time after a person had been appointed as a municipal manager or a manager directly accountable to a municipal manager.

In order to consider the differentiation between the appointments of municipal managers and managers directly accountable to municipal managers, it was necessary to consider the provisions of the principal Act. With reference to the provisions of the principal Act, they had quoted and discussed these provisions as they would be, should the Bill be enacted and come into operation.

Section 54A provides a roadmap on how this would be approached, particularly 54A(11), which provides that “A person who had been appointed as acting municipal manager before this section took effect, must be regarded as having been appointed in accordance with this section for the period of the acting appointment.” In terms of section 54A (1), the municipal council must appoint a municipal manager as head of the administration of the municipality. Section 54A(3) provides that a decision to appoint a person as municipal manager, and any contract concluded between the municipal council and that person in consequence of the decision, was null and void if the person appointed did not have the prescribed skills, expertise, competencies or qualifications, or if the appointment was otherwise made in contravention of this Act.

Section 56(1) states the municipal council must, after consultation with the municipal manager, appoint a manager directly accountable to the municipal manager. Section 56(7) states that a person appointed in a permanent capacity as a manager directly accountable to the municipal manager when section 56 takes effect, must be regarded as having been appointed in accordance with this section.

Section 57 makes it clear that, in relation to the employment contracts of municipal managers and managers directly accountable to municipal managers, it was clear that there was a definite differentiation between the requirements for the employment contracts of municipal managers and those of managers directly accountable to municipal managers. It was evident that the employment contract of a municipal manager contained more requirements than the employment contract of a manager directly accountable to the municipal manager. The requirements for the employment contract of a municipal manager were also more specific than those in respect of a manager directly accountable to the municipal manager. One such specific requirement was that the municipal manager’s employment contract must be for a fixed term, and another was that the employment contract must include a provision for the cancellation of the contract in case of non-compliance with the employment contract or the performance agreement.

In respect of the employment contract of a manager directly accountable to the municipal manager, no such specific requirements existed, except that the employment contract must be in writing and that it must include details of duties, remuneration, benefits and other terms and conditions of employment, as agreed to by the parties, subject to consistency with the principal Act, any prescribed regulations and any applicable labour legislation.

 There was thus no discretion for the municipal council to appoint a municipal manager on a permanent basis, whilst there was indeed such discretion for the municipal council (in the section 57(7) of the principal Act), with reference to the appointment of a manager directly accountable to the municipal manager. In other words, in its current form, without the proposed deletion by the Bill of section 57(7) of the principal Act, and with the proposed insertion of the new section 57(7A), the principal Act provides that, with regard to a manager directly accountable to the municipal manager, the details of such manager’s duties, remuneration, benefits and other terms and conditions of employment may be as agreed upon with the municipality, provided that they comply with the principal Act, any prescribed regulations and any applicable labour legislation.

Adv van Aswegen then presented some case law to further demonstrate her conclusion. She started with the case of Nongoma Local Municipality v Biyela and Others, where the Labour Court had considered the employment contract of a manager directly accountable to a municipal manager, and had found that if the discretion contained in section 57(7) of the principal Act was removed by the Bill and the proposed section 57(7A) was not inserted in the Bill, the municipality would, by operation of the staff establishment, be constrained to conclude indefinite (i.e. permanent) employment contracts with managers directly accountable to municipal managers.

Also, in the case of Uthukela District Municipality v Khoza and Others, the Labour Court found as follows:

• When it comes to a municipal manager specifically, section 57(6) of the principal Act (i.e. a statutory requirement) prescribes only fixed term employment as an essential term of the employment contract, and this section also determines this fixed term.
• However, where it comes to the manager directly accountable to the municipal manager, it      was the employment contract itself (i.e. the agreement between the manager and the municipality) that regulates and determines employment terms.
• The municipal council could, however, resolve to also apply section 57(6) to a manager directly accountable to a municipal manager, and if the municipal council did this, it had to be unambiguously recorded in the employment contract itself.
• Neither section 56 nor 57 of the principal Act (without the amendments proposed by the Bill) prescribes only permanent employment of managers directly accountable to municipal managers, but section 57 of the principal Act prescribes only fixed term employment for municipal managers.

On the constitutionality of differentiation between municipal managers and managers directly accountable to municipal managers:

Section 7 of the Constitution deals with the rights of persons, as contained in the Bill of Rights. Section 7(2) of the Constitution in particular states that the state must respect, protect, promote and fulfil the rights in the Bill of Rights. However, in terms of section 7(3) of the Constitution, the rights in the Bill of Rights are subject to the limitations contained or referred to in section 36. In terms of section 8(1) of the Constitution, the Bill of Rights applies to all law, and binds the legislature, the executive, the judiciary and all organs of state. Section 9 of the Constitution specifically provides for the equality of everyone. Furthermore, it must be noted that section 23 of the Constitution also provides for everyone’s right to fair labour practices, which means that every worker has the right to form and join a trade union and to participate in the activities and programmes of a trade union.

The limitation of rights clause in section 36 of the Constitution provides that rights contained in the Bill of Rights may be limited only in terms of a law of general application to the extent that the limitation was reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including the nature of the right, the importance of the purpose of the limitation, the nature and extent of the limitation, the relation between the limitation and its purpose, and whether less restrictive means to achieve the purpose was available. This list was not exhaustive, however.

In the view of the advocate, the fact that a municipal manager was, amongst other things, the head of the administration and the accounting officer of a municipality, who was subject to the policy directions of the municipal council, served as a justifiable basis for the principal Act providing specifically that the municipal manager’s employment contract must be for a fixed term of five years, not exceeding a period of one year after the election of the next municipal council. The municipal manager’s term of employment was thus connected to the municipal council’s elective term for a very specific reason. Importantly, section 51 of the principal Act states that the administration must be structured in such a way so as to enable the municipality to hold the municipal manager accountable. In this regard, section 51 lists the general responsibilities of the municipality with regard to the administration. The onus was on the municipal manager, as head of the administration, to see to the implementation of these principles and values in his or her administration. Critically, section 51(d) stipulates that all staff and councillors must align their roles and responsibilities with the priorities and objectives of the Integrated Development Plan and, as the head of the administration of the municipality, the municipal manager must ensure that the Integrated Development Plan was implemented.

In light of the various provisions and case law that she overviewed, Adv Van Aswegen was of the view that the differentiation between the employment contracts of municipal managers and managers directly accountable to municipal managers was intentional and would be justified in terms of the objectives that the Department seeks to achieve in respect of creating institutional stability in municipalities. It was their opinion that the differentiation between municipal managers and managers directly accountable to municipal managers was not arbitrary and served a legitimate government purpose when tested against the limitation provision in section 36 of the Constitution and the tests laid down by the courts with reference to section 6(4) of the Employment Equity Act.

The Chairperson thanked Adv Van Aswegen for her presentation. She said that she had seen a presentation by the Department of Justice and Constitutional Development (DoJ&CD) earlier in relation to a case study from the Western Cape (WC). There was also research by the Institute for Local Government, and a PDG study by the DoJ&CD, and there was evidence that was going to be presented that showed that fixed contracts were vulnerable to abuse. These were the issues that had been raised by the Committee with regard to managers reporting to municipal managers while permanent municipal managers remained on fixed term contracts. The Department said it had done consultations which the Chairperson was still waiting on; the Department needed to talk on each of the submissions that it had made to the Committee.

Consultation in three provinces

Mr Tebogo Motlashuping, Deputy Director-General (DDG), CoGTA, talked about the lessons learnt in the consultation process in three provinces, starting with the Western Cape.

There had been municipalities in the Western Cape that had appointed managers directly accountable to municipal managers on a permanent basis, which provided empirical and qualitative evidence of the success of appointing senior managers on a permanent basis. At the same time, the experiences also revealed the adverse effects of having senior managers on fixed term contracts. Empirical evidence substantiated justification for the support of proposing the permanency of managers directly accountable to municipal managers in municipalities. This was looked into on four sub-issues that fell under governance:

Security of tenure showed:

• Increased levels of performance were noticed, as incumbents were more secure in their positions and therefore able to plan their career paths and personal growth trajectory. Increased levels of performance were registered, as incumbents were more secure in their positions and therefore able to plan their career paths and personal growth trajectory.
• Due to cumbersome procedures, combined with the minimum requirements as prescribed in prevailing legislation, it had become extremely challenging for municipalities to timeously fill vacant posts, resulting in a prolonged gap in the management team.
• The frequent need to appoint new senior managers on a relatively short-term basis increased the risk for nepotism and interference, while fixed term contracts had the tendency of leaving unavoidable vacancies in the senior management team, which resulted in instability in a municipality.
• Municipalities found it increasingly difficult to attract suitably qualified professionals to apply for contract positions in scarce skills areas of planning, engineering and finance. Rural municipalities in particular struggled to attract competent, skilled and experienced senior managers on fixed term contracts. However, where permanent employment was offered, candidates were more likely to apply for senior management positions in rural municipalities.

Regarding institutional stability and memory:

• Retention of highly experienced managers, who had built up extensive institutional memory, including knowledge and acumen, could be achieved through the introduction of permanent positions. This was currently not possible, as time, training, resources and energy was put into a newly appointed incumbent, and therefore when this contract expired, this investment could be seen as wasted and needed to be repeated when a new person came into the position. Permanent appointments contributed to the effectiveness and efficiency of the administration and management in the municipality.
• Where vacancies arose, there was increased pressure in smaller municipalities for the municipal manager to oversee the vacant portfolio for a prolonged time, as recruitment and selection processes might take some time. It had often been shown that potentially good candidates applying for a senior management position would withdraw from the recruitment and selection process for reasons of security of tenure -- in other words, the insecurity of a fixed term contract. Candidates had in the past indicated preference for permanent employment.

Succession planning:

• In the current practice of contract appointments, there were no career path opportunities for middle managers wanting to be appointed in senior positions, as they did not want to sacrifice their permanent positions for a fixed term contract at a senior level. Creating stability in senior management through permanent appointments would encourage middle management staff to improve their skills set in order to be eligible for upcoming vacancies.
• Permanent positions may assist smaller municipalities to attract and retain suitably qualified incumbents.

Building a stronger management team would happen through:

• Equitable distribution of professionally skilled and qualified persons across the public sector.
• Greater levels of commitment by permanent appointees to realise the longer-term vision of the municipality, for the benefit of the community.
• A positive organisational culture could be embedded where a management team remained stable and in place for a longer period.

It was evident, from an analysis of the above, that municipalities with permanent appointments overall performed better, as objectively determined by the external rating agency. These ratings influence the perceptions by investors, the community and other stakeholders, which play an integral role in the municipality. One could also observe that there was greater stability in the senior management team of municipalities with permanent appointments, in contrast to those which had fixed term managers. This was manifested through a relative higher number of vacancies, as well as the disciplinary actions instituted against managers in the respective categories.

This instability then resulted in the systematic breakdown of the ethical environment and internal controls of the municipality. This was evident in the high levels of irregular expenditure reported by the Auditor General in its most recent report, and also the high number of allegations of fraud and corruption in municipalities with managers on fixed term contracts.

Case Study: Mossel Bay Municipality

Mossel Bay Municipality had been hailed as one of the best performing municipalities in South Africa. This accolade could largely be attributed to effective and efficient leadership, management stability and a strong emphasis on good governance and oversight.

Among its achievements, the following could be highlighted:

• Clean audits: Six consecutive years of clean audit findings by the Auditor General. It was the top performing municipality in 2019, as per Good Governance Africa, and top performing municipality in 2018 and 2020, as per Ratings Africa.
• Town of the year: 2017 - National: Most successful internship programmes: 2016 – 2020.
• Implementation of the performance management system (PMS) to the lowest level in the organisation since 2011.
• All 57 middle managers had undergone an accredited management development training programme, through the support of the Department of Local Government.
• Improved payment percentages by debtors -- 2013 revenue collection level of 96%; 2019 revenue collection level of 99.44%.
• 2016: Cleanest town of the year – national award. 2019: Best national Thusong Centre.
• Management Stability: Same management team since 2016, except for one vacancy.
• No allegations of fraud, corruption and maladministration raised.

There was a rational argument to consider that local government was in fact best served by a lasting senior civil service leadership in the form of permanently appointed senior managers that could provide the expertise and knowledge to serve the legitimate democratic demands of the populace with expertise, experience, and memory.

Municipal Systems Amendment Bill: SALGA supplementary comments

Mr Lance Joel, Chief of Operations (COO), South African Local Government Association (SALGA) ,provided a background of matters that it had previously raised at a previous meeting. It had stated that instead of the current Bill focusing only on validating the 2011 Amendment Act, a more comprehensive review of the Systems Act needed to be conducted. The role of the MEC had also been loosely interpreted as “concurrency,” which meant prior approval. There were some interpretation challenges as to whether employment contracts for managers directly accountable to municipal managers were for a fixed term period or on a permanent basis. There was also an issue of the validity of the regulations on the appointment and conditions of employment of senior managers (2014), having regard to the Constitutional Court’s declaration of the invalidity of the Systems Amendment Act, 2011.

Dealing with the interpretation challenges presented at the previous meeting, SALGA commented that through section 6 (Sec 57), – employment contracts for municipal mangers and managers were directly accountable to municipal managers. SALGA went on say the requirements for the employment contract of the municipal manager, as set out in section 57 (6), could be extended to managers directly accountable to the municipal manager. This would no longer be the case, as per the proposed amendment. This repeal did, however, not take away the discretion of the municipality to determine the terms of employment of the managers directly accountable to the municipal manager. Such managers could be appointed permanently, or on a contract basis, for a period determined by the council.

SALGA recommended permanent appointment because it appreciated succession planning and investment in ongoing leadership development programmes. Permanent appointments supported the development of new managers; encouraged continuity and retention of institutional memory in municipalities; built the much-vaunted institutional stability in municipalities; were less vulnerable to abuse in unstable municipalities; and would improve sector-wide planning and implementation, including performance and service delivery by the municipalities. Permanent appointments also allowed for formal handover processes to ensure that new councillors and municipal managers were properly briefed.

SALGA had conducted a survey which confirmed:

• 84% of senior managers were appointed on fixed term contracts, with an overwhelming preference by municipalities for fixed term contracts over permanent appointments (16%);
• As much as municipalities with permanent senior manager secured “clean” audits, so too did municipalities with fixed term senior managers;
• As much as municipalities with fixed term senior managers had obtained disclaimer audits, so too did municipalities with permanent senior managers;
• Similarly, as many municipalities with fixed term senior managers had been invoked with Section 139 interventions as municipalities with permanent senior manager;
• The survey did not corroborate the view that municipalities were more stable or performed better if senior managers were permanently appointed.

SALGA therefore recommended that the Committee note these survey findings.

It also asked the Committee to accept SALGA’s supplementary submissions on the Systems Amendment Bill, that the bill should continue to provide a discretion to municipal councils to appoint senior managers on either a fixed term contract or on a permanent basis. The bill should provide for the Members of Executive Councils (MECs) to monitor appointments in line with the legislative framework and that a rigorous performance management system (PMS) should be introduced for ongoing performance assessment and corrective action where necessary. Finally, SALGA recommended that urgent work should be commissioned towards the total overhaul of the Systems Act.

Discussion

Mr K Ceza (EFF) asked SALGA about the audit outcomes referred to in the presentation. There was clearly no guarantee as to what could happen if fixed contracts were to be implemented because based on the survey, people tended to relax once they acquired permanent positions. Although it was important to keep good working conditions, as per the Conditions of Employment Act, which were outlined as a benefit for permanent contracts by SALGA, it was important for SALGA to ensure close monitoring of performance in these municipalities because the survey did not point to a guarantee of performance.

Mr B Luthuli (IFP) said the way SALGA had been conducting their work showed that they knew exactly what they were doing. He had not been comfortable with the proposal by SALGA at first, but he was now confident that it was a step in the right direction.

Mr H Hoosen (DA) said the quality of SALGA’s work was improving, particularly their research, with the study that they had done. However, he thought there should be an expansion of the key areas that SALGA’s research had covered. He said the bottom line – from his perspective as an opposition politician – was that having permanent staff suited them for obvious reasons. The question that followed was whether it was to the benefit of municipalities, and the answer to that was no. If he were to put the interests of his party first, he would say permanent positions should be the norm for municipalities. He and other Members had come from municipalities, and having permanent members had been the way to go. He gave a scenario where, if someone was in a three-year fixed term contract, in the last year of that contract the propensity for corruption was much greater because that person knew that they were not going to be there for long period of time. It would be an incentive for corruption. This was why he said there should have been other key areas looked into by SALGA, because in the end permanent positions were not in the best interest of municipalities. This would have been helped by collaboration between the Department and SALGA.

The earlier question on the constitutionality of the proposal could be put to bed, because it was very clear that the proposal was constitutional. What was left here was the politics of the issue, and at some point there was going to be a need for that conversation so that the Committee knew where it stood.

Ms H Mkhaliphi (EFF) said agreed with Mr Hoosen, that SALGA always excelled with presentations. She also agreed with SALGA that instead of looking at the amendment in pieces, it should perhaps be looked into it holistically and broadly because as far as she was aware, the Committee was no longer looking only at what the constitution was saying, so perhaps it was time that it also took a different perspective. As an EFF Member, she thought that positions should be permanent because workers’ rights should not be affected by the functionality of municipalities, which was comprised of many things which sometimes were beyond workers. One of the benefits that were wanted from the Committee, SALGA and the municipalities was functionality that was able to counter corruption. If that was not looked into, it would always contribute to the inadequate functionality of municipalities. The end goal for the Committee and the Department was to professionalise municipalities, but one must not lose sight of the real problem here -- corruption.

Secondly, she wanted to raise the same point that had been raised by SALGA -- that the implementation of this proposal was not the solution to everything. Rather than saying it was the ANC that was failing – and as a citizen of eThekwini she was also affected by the shortcomings of the ANC -- there needed to be a strengthening of municipalities so that they were able to deal with internal processes.

Thirdly, she wanted to deal with the issue of fixed term contracts. This was a problem, even if the amendment of the Labour Relations Act was attempting to address it. Most of the time, the labour court did not have the capacity and was unable to deal with fixed term contracts, and that was why she agreed with SALGA that this issue should be looked broadly. She also agreed with Mr Hoosen that SALGA and the Department should have been in contact with one another. This had happened in the past. As a result, what one saw happening now was the Department saying that the proposal could go ahead, while SALGA said otherwise. This also had to be thought of futuristically. There should not be a situation where municipal managers could not be respected by senior managers because of the fact that they were not there on a permanent basis. One could not accept anarchy as political parties. These issues needed to be addressed.

Ms D Direko (ANC) said she had seen the consultation done by CoGTA, and was not satisfied by how it had been done for the Committee to take such decisions. One could see that that consultation had not done been correctly, because when one was looking at local government the first point of departure should be SALGA and the labour movements in the municipalities. She agreed with Mr Ceza that there was no guarantee that the good performance of the municipalities was because of this proposal. In her experience good performing municipalities were as a result of good governance and other factors, so what guarantees did they have to show that the improvement in municipalities was a result of these changes? She thought that the presentation by SALGA was one that represented what was happening in the municipalities, and they had no biases. She clarified that she was not saying that people should not be permanent, but there were realities in these municipalities that needed to be taken into consideration. Her proposal was for a comprehensive consultation between CoGTA and SALGA, and a meeting between the relevant stakeholders, and then they should come back to the Committee with a comprehensive report.

Mr C Brink (DA) said three conclusions could be drawn from the presentations. First, it was apparent that there was no legal impediment to making section 56 permanent. Secondly, CoGTA consulting other provinces and referring to international experiences was better for governance in the long term; he was not a member of the current government, so he would just have to listen to them, but their arguments were not plausible. Thirdly, the SALGA a survey of its members and its result was inconclusive, as it said that some municipalities with fixed term appointees did well and some did not. In essence there was no direction that this survey pointed to. He did not think that SALGA had made a case that this pointed to any suggestion in particular, because their survey had not given them a persuasive or clear answer. He was not sure if further consultation was what was required on this issue, so perhaps it was just an issue of not agreeing with the conclusions that had been drawn. Parliament had already gone past the time prescribed by the constitutional court, so this was an issue that needed to be concluded soon.

The idea of fixed term contracts in the private sector was premised on the availability of people for these posts, and that people in the private and public sector would readily apply for these jobs. It was known that the government was not good at attracting people from the private sector and without the right kind of cadre to attract public servants, who were most likely to apply for these jobs anyway? He said the simple answer to why the municipal mangers should also not be made permanent was that having fixed term contracts gave the political leadership a lever over the administration. It was a lever that one could use without disrupting the entire top management of the municipality, and so it was a more precise way of gaining that control.

Mr B Hadebe (ANC) also welcomed the scientific nature of SALGA’s report, because they were giving information on what was actually happening on the ground. One must recognise that what SALGA was presenting was not a homogenous picture of what was happening in municipalities. He thought the most logical thing to do was to not be prescriptive, and allow municipalities to decide what they thought was in their best interest, because clearly there was no obvious answer as to what worked best. With the concurrence of MECs, they would be able to make decisions that best suited their regions. SALGA’s position did not prohibit them from adopting either alternative – they could adopt the section 56 proposition. He recommended that the Committee adopt the research presented by SALGA. He added that fixed term contracts were reviewed annually by municipalities, so there was nothing preventing municipalities from renewing them if they felt that the performance of the employees was satisfactory.

Mr I Groenewald (FF+) he first wanted to ask the COO of SALGA about slides 10, 11 and 12. Slide 11 stated that there were 14 clean audits in over 200 municipalities. If one had seven municipalities out of 62 that had clean audits, this was a total of 13.46% of municipalities with clean audits on permanent appointments. On fixed term contracts, one then had 6.7% of clean audits at these municipalities. If one was to put these together, then one would see that 13.33% of fixed term contract municipalities had clean audits, but those with permanent contracts had 66.67% of clean audits. He warned that they should be careful to look at the numbers correctly.

He had also made calculation on disclaimers, which indicated that on fixed term contracts one got 61.3% of disclaimers, and on permanent contracts the figure was 38.61%. Corroborating this with the statistics that were brought by SALGA, it became clear that when there was a permanent appointment one got a better audit outcome. However, he also agreed with Mr Brink that there was no clear way that had been suggested that was better than the other. What he wanted to add was that it did not matter what approach was being taken, but what needed to be considered was that whatever decision was taken had to be the best value for money for tax payers. That was why he agreed with Ms Mkhaliphi this should not be looked at only through the lens of the political party, but through the lens of how it affected the people in these municipalities.

Ms M Kibi (ANC) said she concurred with what had been said by other Members of the Committee about SALGA. As had been pointed out, there was no clear outcome that could be taken going forward, and municipalities should take the option that best suited them. She proposed that there be an investigation into the permanent positions. One needed to look at the statistics before managers were permanent, and see if there were any major differences between them. On the matter of managers being corrupt in the last year of their fixed contract, she disagreed. As someone who came from municipalities, what tended to actually happen was that these people actually tend to do well because they wanted to retain their employment after their contracts had ended. She also thought that there should be another survey, where the different municipalities could be determined to see which proposal worked best for them.

The Chairperson said she had done a little bit of research on her own and found that the municipality of Sangqu in the Eastern Cape (EC) had had clean audits for a very long time. This was because there had been the same municipal managers there for a very long time -- around 20 years – and the COO had been there for a while as well. All of this had been at the discretion of the council there, who constantly renewed their contracts because he felt that they were doing a good job. One needed to look at the issue of handovers when it came to fixed term contracts. The municipal manager had started as an intern. She thought that a council’s discretion should rest with the municipalities.

She also raised an issue of growth within the municipalities, saying she thought that some municipalities thrived through the growth of staff within them. Staff members served certain amounts of time within those municipalities before they could move up to management. As such, it was best to allow discretion within municipalities. The Committee must not be too prescriptive on how the various municipalities should function. She would have wanted to hear more from other provinces on what they were saying.

She said that when the Committee started working on the bill, it had been under a set period, and that time had lapsed. It therefore had to work on adopting the changes that it could adopt for now. The Committee would have another chance to make an amendment to the bill at a later stage. For now, it should make the changes that it could make. There must be something that was progressing under this tenure; if there were things that required further changes, the Committee could make them at a later stage.

The Chairperson then handed over to Adv Van Aswegen to reply to some of the questions that had been posed by the Committee to her presentation.

Response to questions

Adv Van Aswegen first replied to Mr Ceza’s question on the guarantees of erosion of corruption through the introduction of permanent positions. She said she needed to remind everyone that one could not legislate for every situation. From what she gathered from Mr Ceza’s question, it seemed as though he was looking from the perspective of implementation, so what it came down to was that there were currently different implications to this amendment, so it depended on how the legislature dealt with these implications. As Members had already mentioned, this was really more of a political decision. SALGA and CoGTA needed to sit down and talk among themselves about what the most suitable decision for the various municipalities was, in a way that best countered corruption.

The Committee was told that there actually were consultations with SALGA on the matter being proposed. There had been was a presentation made at the National Economic Development and Labour Council (Nedlac). There had been a proposal at Nedlac that stated that while this process of amendment was happening, there should be a parallel process happening where there were consultations with SALGA and other stakeholders to look at a wholesale amendment of the Systems Act. A committee had been formed to look at this amendment, and SALGA had been represented on this committee. Many of the concerns had been discussed. In fact righ,t before the spread of Covid-19, the committee was meant to meet with drafters so that the concepts that were discussed already could be put on paper.

The second point that he wanted to make was that there were a couple of reasons for the delay, even after the expiry of the period prescribed by the Constitutional Court. Firstly, there were issues with the competency levels of senior managers, the need to have a data base for senior managers, as well as having outlines on the process of appointments, among others. This was the process that would allow CoGTA to see if the people coming into the sector were qualified or not. For Members to get satisfactory answers to the questions that had been posed at the meeting, they needed to look at a wholesale amendment of the Act.

Mr Joel addressed Mr Brink’s question about broadening the scope of the people who were looked into when attempting to fill positions by looking at other public servants who were in the municipal sector in particular; and the bad track record of the government in attracting talent from the private sector. There were actually a lot of people from the private sector who were joining municipalities on fixed term contracts, and if Mr Brink wanted, he would provide him with that information.

SALGA was committed to professionalism at the municipal level, but that also came with the realism that this was something that required time, and it was not going to be achieved overnight. He posed a question as to why it was that at the national or provincial level, posts were not linked to the administration that was working at the time, unlike what was happening at municipal level. He said these were the questions that were being addressed by this wholesale look at the Systems Act, because in principle or at face value, it did not seem to make sense why this was the case.

In a conversation with the SA Institute of Chartered Accountants (SAICA) about a week ago, something that was also discussed was about professional bodies. SAICA had been asked why some of their members were part of the wrongdoing in municipalities, and what were they doing as a professional body to counter these kinds of acts. These professional bodies were being taken to task over their responsibility to make sure that the professionalism of their members was taken seriously, and should show through their behaviour.

He said further steps could have been taken in the process of acquiring information, and he agreed with Ms Kibi and Mr Hoosen on that point. SALGA would take on that work and look at other key areas that would amplify the validity of the research that they had done already.

In response to Mr Groenewald, he said SALGA had isolated the clean audit outcomes from the qualified ones in respect of fixed term and permanent contracts. The statistics could be reconfigured to feature more key areas, but in his view the result would not be so different as to change the conclusion that had been reached. Indeed, at this stage, the information that was there were neither negative or positive indications, so one needed to ask if at this stage there was really a necessity to move away from the current situation. Perhaps waiting while running parallel research, which looked further into the matter, was the way forward until a definite route had been found. He wanted to respond to the Committee in writing on the issue of consultation, because the best way to respond to that would be based on facts, and a written response would allow for that to be done well.

Mr Bheke Stofile, Committee Member: National Executive, SALGA commented that positions of importance in the national and provincial government did not really abide by same rules that the municipal mangers had to go by, because one could see from the lack of regulations on the matter that local governments were being taken as a level of government, not an entire sphere. He was pleased to hear that some Members of the Committee had been councillors in the past. He asked if senior managers telling municipal managers that they were going to be out of work by the end of their contracts added to their professionalisation, because he thought not. The professionalisation of this sector should take priority, and should be taken seriously because it was important for the functionality of municipalities. These laws should be robust and flexible to cater for the different municipalities. He then referred to the example of Sangqu that had been used by the Chairperson, and asked the Committee to imagine the situation if that municipality did not have the discretion to make that kind of decision for itself. Municipalities should be allowed make decisions on what they think would best serve them. What made the private sector better than the public sector was the link between the individual and the business.

The Chairperson said some of the speakers had promised written responses, which the Committee would await. She also felt that at this meeting in particular, the Committee had dealt with the political aspect of the matter at hand very well. On 28 August, the Committee would have an opportunity to iron out all the remaining details by dealing directly with the proposed amendments. Members should also look at the documents that were going to be discussed. If the Committee needed any help, the Parliamentary advisory team could be of assistance.

The meeting was adjourned.