Joburg faces court battle over ‘irresponsible’ R10bn wage deal

Johannesburgsays it is financially stable enough to afford the terms of a R10.3bn salary agreement with municipal workers for the next three years. However, theDA has opposed the dealand has threated to take the matter to court arguing that 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 Modingoanesaid: “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 threats but had not yet received the court papers. Belinda Kayser-Echeozonjoku, DA Joburg caucus leader, said the city has chosen to prioritise an unaffordable wage agreement over restoring basic services.

The DA is not opposed to inflation-based increases…[but] this decision is fiscally reckless and irresponsible. Kayser-Echeozonjoku said any salary adjustment needed to be budgeted for and aligned with the city’s financial reality. In a letter from the law firm Minde Schapiro & Smith to the mayor and city manager, the party 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.