11 October 2023
The liquidity challenges facing the City of Tshwane in recent months, compounded by the ongoing crippling unlawful and unprotected strike action, has led management to take a decision to stagger the payment of the 13th cheque to its employees over a three-month period.
“The dire current financial constraints, which include a cash flow deficit, declining revenue collection and heightened operational costs due to the ongoing illegal strike, are factors that unfortunately compelled the City to reconsider the payment of the 13th cheque to its employees, which was originally scheduled for processing at the end of November 2023, as has always been the norm,” said the City Manager, Johann Mettler.
In the first three months of the new financial year which started in July 2023, the City did not achieve its revenue-collection target. In July 2023, the revenue collection rate reached 82,02% but dropped to 76,08% in August 2023.
This shortfall has significantly impacted adversely on the City’s ability to meet its financial obligations, with a particular concern for payments to bulk supply creditors, such as Rand Water and Eskom.
Notwithstanding the fact that the budget process allocates funds for the 13th cheque payment for all employees, actual revenue collection impacts cash flow. At present, revenue collection falls short of the projected year-to-date target.
“I must draw attention to the fact that my actions are not willy-nilly, they are informed by Section 62(1)(a) of the Municipal Finance Management Act (MFMA) which demands, especially under the financial circumstances the City finds itself in, that the accounting officer of a municipality is responsible for managing the financial administration of the municipality. For this purpose, he/she must take all reasonable steps to ensure the effective, efficient and economical use of the municipality’s resources. Section 65(2)(a) outlines the need to include procedures for the approval, authorisation, withdrawal and disbursement of funds,” Mettler emphasised.
It is against the aforementioned circumstances that the City is forced to make this difficult and painful decision to pay the 13th cheque in phases over three months to all its employees, from TASK Level 1 to 22, to the total amount of R565 166 041.
The payments will be staggered as follows:
- Employees on TASK Level 1 to 10 will receive their full 13th cheque at the end of November 2023, as has been the norm over the years
- Employees on TASK Level 11 to 15 will receive their full 13th cheque at the end of December 2023
- Employees on TASK Level 16 to 22 will receive their full 13th cheque at the end of January 2024
City management is mindful that this is the first time in many years that it has had to arrive at this unpleasant decision, which completely goes against the norms and practices of 13th cheque payment to employees, as expected every year at the end of November.
Last Wednesday, the City Manager had a meeting with the Independent Municipal and Allied Trade Union (IMATU) and the South African Municipal Workers’ Union (SAMWU) to alert and inform them of this development. Furthermore, and as previously conveyed to the unions, the accounting officer impressed upon them that the books of the City remain open for the purposes of transparency.
“Lastly, I would like to sincerely apologise to some of the personnel who will be affected by this decision, however, it had to be taken to keep the City afloat,” Mettler added.
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