The South African Local Government Association (Salga) said on Wednesday it had successfully concluded the salary and wage negotiations with trade unions in the local government sector‚ and that "strike action and its destabilising effects have been averted".

"The agreement is a three year deal which will ensure labour peace‚ medium term budget certainty and stability in the sector‚ to the benefit of all residents of our country‚” Salga said.

The salary and wages agreement would cover 270 000 employees in 278 municipalities.

The agreement includes‚ for year one (2015/2016) a 7% increase effective from July 1, 2015‚ for year two the average CPI (inflation) + 1%‚ for year three the average CPI + 1%.

The minimum wage will increase from R5 621 to R6 014.93 per month while a special purpose medical aid benefit instrument is to be created that targets low income earners and lastly‚ the home owner allowance in the sector will increase from R545 to R700 per month.

Employees earning below R8 000 per month will under specific provisions receive a non-pensionable monthly allowance to address the “gap housing” problem being experienced in the sector.

“The conclusion of the salary and wage agreement for the sector is a significant milestone. This will pave the way for the sector to address other pressing matters such as retirement fund reforms‚ the effective procedures for the management of discipline‚ and providing clear governance and performance standards that have to be followed by parties‚ municipalities and employees in general to effect and sustain improvements in the quality of public services delivered countrywide‚” Salga said.

“The parties also concluded a stream-lined set of uniform conditions of employment which will greatly assist municipalities in ensuring effective management and delivery of services.

“One of the highlights of these negotiations was that we spent a significant amount of time discussing and incorporating a service charter into the agreement. The service charter will ensure that all parties express their commitment to improving service delivery to the benefit of all citizens of South Africa‚ improve good governance and fight corruption.

“Trade unions in the sector and Salga were negotiating this time around under difficult conditions. In order to improve the performance of the economy‚ government adopted a stringent fiscal policy stance compatible with lower inflation and interest rates. Government’s macro-economic strategy prescribed that wage demands and settlements had to be realistic and responsible. We are glad to announce that we have achieved this.”