SAMWU Post-CEC Statement, May 2019

22 May 2019

SAMWU Post-CEC Statement, May 2019

The South African Municipal Workers’ Union (SAMWU) held a successful Special Central Executive Committee meeting on the 21st and 22nd May 2019 in Johannesburg. The Special CEC was preceded by a FinCom meeting which held on the 19th and 20th May.

This was the first constitutional meeting of the union following the April CEC which elected new National Office Bearers (NOBs) in Bloemfontein. The newly elected NOBs were tasked by the April CEC to ensure that both FinCom and CEC meetings are held to reflect and chant a new path of renewal, rebuilding and unity of purpose.

The Special CEC took place just a few days after we buried Cde Sikhumbuzo Cele, an eThekwini municipal worker who was shot dead by police who were dispersing workers who had peacefully gathered to receive an update from the Municipal Manager. While the CEC was in session, we received news that two eThekwini Metro Police officers were killed while on duty, guarding a residence of a Councilor. The CEC sends its heartfelt condolences to the families, friends and colleagues of the fallen municipal workers. We are of the view that more needs to be done to ensure the safety of workers in the workplace, particularly those who are in harm’s way daily.

The Special Central Executive Committee took place after the overwhelming victory of the African National Congress on the 08th May 2019 general elections. This victory should mark the recommitment of the movement, to respect the will of the people and leaders in positions of responsibility should humble themselves in the service of the people.

Even if the ANC has won eight out of nine Provinces, we should note the worrying factor of reduction of percentages in the overall and all reduction of seats in legislatures. This reflects a structural challenge that exists amongst our people, about how they feel about the ANC and calls for self-introspection both within the ANC & Alliance and government.

Ernst &Young Report and Union Finances

In 2016, SAMWU CEC resolved to institute a forensic audit into allegations of misappropriation and irregularities of the union’s finances. A competitive bidding process was undergone and ultimately Ernst & Young was appointed as the preferred bidder. Ernst & Young completed the audit and presented the audit report to the union’s former President, Pule Molalenyane. This report, however, was never presented to any of the union’s structures. According to Ernst & Young, Molalenyane is the only person who had access to the report, a report which was later leaked to the public.

Ernst & Young has today finally presented the report to the Special CEC which investigated five allegations.

1. Significant decrease in the union’s operational and reserve account and unconfirmed bank accounts.

The auditors have confirmed that the union had 8 bank accounts in 2012 which had a combined balance of R94,569,934.63 million and by 3 November 2015, the union’s bank balance was R6,252,404.57 and not the R538 which has been widely reported in the media.

The auditors have found evidence of irregularities and fraudulent activities which have contributed to the drastic decline in the union’s bank balances, they have further highlighted that the decline in bank balances was compounded by the fact that the union was spending more than it received in terms of member subscriptions, noting that the union does not have any other revenue generating stream and thus relies solely on what is received from municipalities.

The auditors have also recommended to the Special CEC that SAMWU should establish a panel of legal firms so to avoid a repeat of the situation wherein the union has paid over R120 million to law firms since 2012.

The Special CEC has therefore resolved that the attorneys which have been implicated in the report should be removed from the union’s panel of attorneys and also be reported to the law society. Employees who have been implicated in the report will be charged with gross negligence and criminal charges will be laid with the police. Where such a determination is made monies will be recouped from all the individuals that are implicated.

The special CEC further mandated NOB’s to open criminal cases against other persons/companies involved in the stealing of money from the union account

2. Alleged irregularities in respect of the implementation of SAMWU’s Strike Fund and Reimbursement strategy.

The union had created a strike fund which was to compensate members who are not paid they salaries when employers apply the no-work-no-pay principle. In 2012, the union decided to stop the strike fund as it was distributed unfairly.

As per the CEC resolution, the strike fund was used to procure t-shirts for the union’s members. The auditors have recommended that the union should develop policies on how to deal with and manage funds of this nature in order to prevent possible abuse in future.

3. Alleged irregularities in respect of the cost incurred when the union relocated its Head Office from Cape Town to Johannesburg.

It is alleged that a service provider was irregularly paid R3 million which was noted as storage fees. The auditors have however come to a conclusion that there is no sufficient evidence to confirm this allegation. They, however, have recommended that the union should conduct a diligent search to obtain further information in order to recover or reconstruct lost documents to enable for further investigations on this matter.

4. Alleged irregularities in respect of the costs incurred in renovating the union’s Johannesburg Head Office.

SAMWU had appointed a service provider to refurbish the building at Frederick str in Johannesburg. Due to the fact that the Service provider did not cooperate with the investigation, the auditors were unable to confirm this allegation and could therefore not make recommendations on this.

5. Alleged irregularities with regards to SAMWU operating expenses incurred during the union’s 11th National Congress in 2015.

The auditors found no sufficient evidence to support this allegation. They have however noted that a total of R4,825, 443.31 was spent for the union’s 11th National Congress which was held in Durban in 2015.

The Ernst & Young has indicated that the report is private and confidential as it contains details of individuals and entities. In the spirit of accountability and transparency, the Special CEC has requested Ernst & Young to write an executive summary of the report which will be shared with our members, after all, they are the commissioners of this report.

Organizational and Collective Bargaining

The April CEC had mandated the NOBs to amongst others to ensure unity and cohesion of the union. Immediately after the CEC, NOBs met with COSATU Task Team which was tasked with mediating unity talks as per the federation’s congress resolution.

COSATU presented the team report which was discussed and adopted by the CEC. It is therefore resolved that all workers who were suspended or dismissed from the union are reinstated as members with immediate effect. All staff who have been suspended or dismissed unfairly will be subjected to fair processes of the union.

The CEC further adopted a road map to the 12th SAMWU National Congress which will include;

• Shop steward election – June – August 2019
• Regional shop steward councils – August 2019
• Provincial Congresses – November 2019
• Ordinary CEC – December 2019
• 12th National Congress – March 2020

All shop steward elections which have been concluded in Johannesburg and Pinky Ntsangane Regions, will be rerun as they were not sanctioned by a CEC in terms of the union’s constitution.

The Special CEC received a report on work that has been done on Wage Curve, rationalization of pension funds and housing allowance in the South African Local Government Bargaining Council (SALGBC).

The CEC resolved that the draft agreements should be subjected to discussions by our members. We will, therefore, be convening a Bargaining Conference which would discuss these draft agreements and also prepare us for the upcoming salary and wage negotiations with the employer body.

State of Municipalities

The Special CEC is concerned by the current state which the country’s municipalities find themselves in. According to the Department of Cooperative Governance and Traditional Affairs, of the country’s 253 municipalities, 31% are on the brink of dysfunctionality while 31% are already dysfunctional. The current state of the country’s municipalities has therefore compromised the quality of services rendered to residents.

Just recently, the North West Provincial Government added seven more municipalities under administration in terms of Section 139(1) (a) and (b) of the country’s Constitution, bringing a total number of municipalities in the province under administration to 15 or 68%.

Although we welcome the move by the North West Provincial Government, we are of the view that a long and lasting solution is needed to adequately address the challenges faced by municipalities. We are of the view that a one size-fits-all approach should not be used in seeking to correct the rot in municipalities.

The challenges faced by the country’s municipalities are largely financial in nature. In releasing the 2016/17 municipal audit outcomes last year, the Auditor General noted that municipalities have been on a constant regression. Good and clean governance is slowly being eroded in municipalities, this has been a man-made challenge as a result of the lack of political will to act against those in the wrong.

We will, therefore, immediately after the appointment of a new COGTA Minister seek a meeting with the intention of assisting the department in stabilizing municipalities. We believe that the rot in municipalities will continue so long as there is no accountability on the part of municipal management.

We, therefore, want to persuade COGTA to formulate policies and laws which would hold municipal management and politicians personally and criminally liable for irregular, fruitless and wasteful expenditure based on municipal audit outcomes by the Auditor General.

We would also want to engage COGTA and National Treasury on the need to ensure that municipalities are adequately funded. The country’s municipalities are currently expected to deliver services to the almost 60 million South Africans on 9% of government expenditure. Municipalities are in the coalface of service delivery and as such, they should be prioritized when formulating a budget.

We further believe that municipalities which are struggling to collect or make a revenue should be supported to enable them to deliver on their constitutional mandate of delivering services to South Africans. Municipalities are supposed to be responsive to the needs of South Africans.

Just as other government institutions such as police stations and some schools are not making revenue for the government yet, they are financially supported, the same courtesy should be extended to struggling municipalities, after all municipalities exists for the delivery of services and not for profit making.

The Special CEC has also notes and welcomes the arrest of eThekwini Mayor Zandile Gumede, Dihlabeng Local Municipality’s Cooperate Services Director, Seipati Mabula and Maluti-a-Phofung’s Municipal Manager, Mbongiseni Nyembe. These are the type of consequences we want to see in municipalities as municipalities have become breeding ground for fraud and corruption.

The special CEC further noted with grave concern the backlogs of cases at the Labour Court which translate into the delay of the justice with regard to the dismissed employees and unfair labour practice cases. We also noted that it takes a minimum of the 18 months before a case is set down for hearing.

We also resolved to seek an audience with relevant authorities to get more judges to be appointed on the bench to ensure that our members can receive justice.

On SAMWU Young Workers

In appreciating the fact that the workplace is getting younger and the reality that trade unions are slowly becoming unattractive to young workers and in line with COSATU resolutions, the Special CEC has resolved to formalize the SAMWU Young Workers Forum which seeks to strategically focus on;

• Be the voice of the organized and unorganized young workers in all municipalities.
• Recruitment
• To advocate for the allocation of resources for young workers activities.
• To advocate for the inclusion of young workers into strategic and influential positions both in the working environment and within the labour movement.
• To ensure young workers become the beneficiaries of skills development courses proposed by the union.
• To ensure the unity of young workers within the local government sector.
• To promote international solidarity of public services employees.
The Special CEC has agreed to constitutional amendments which would constitutionalize this structure. These proposed amendments will form part of our package of the 12th National Congress which will be held in March 2020.

Issued by SAMWU Secretariat

Koena Ramotlou
General Secretary
(073 254 9394)


Dumisane Magagula
Deputy General Secretary
(084 806 4005)


Papikie Mohale
National Media Officer
(073 710 0356)