Another example of index-linking and setting a dangerous bench-mark for the private sector.

“The final agreement, signed by Salga, the South African Municipal Workers Union (Samwu) and the Independent Municipal and Allied Trade Union (Imatu) on Friday, included an across the board increase of 6,5%, to take effect from July 1 this year, with an additional 0,5% to take effect from January next year.”

“The three-year agreement made provision for an increase in the consumer price index (CPI) plus 1,25% in the second year — 2013-14 — and CPI plus 1% in the third year. The agreement also provides that a fall in inflation below 5% would serve as a floor, while 10% will serve as a maximum for inflation adjustment, offering protection to both sides.”

“The acceptance of 6,5% across the board was a result of the ‘very strong case’ made by Salga on what it could afford, he said.”

“Samwu general secretary, Mthandeki Nhlapo, said while the agreement did not represent the ‘preferred’ outcome for the union — given the effect of economic difficulties faced by its members — it had been deemed acceptable.”

“The positive ‘exchange of information’ leading up to and during the negotiations had narrowed the gaps between parties, allowing for the compromise, he said.”

“Mr Nhlapo said while signing multi-year agreements was not a position usually taken by the union, the agreement should offer sufficient protection for its members. Both Mr Nhlapo and Mr Koen welcomed the inclusion in the agreement of a provision to fill vacant posts within municipalities, to be discussed at a local labour level.”