NMMU and unions strike deal on salary increases

MAY 18, 2017
NMMU and unions strike deal on salary increases

The Nelson Mandela Metropolitan University on Thursday said that its management and unions on Wednesday reached an agreement on the cost of living adjustment component (COLA) of the salary negotiations, with effect from 1 May.

According to the university; "The salary negotiations have now largely concluded, with both unions accepting the institution’s unconditional 6.4% COLA offer yesterday, with negotiations to continue on the remainder of the two components that make up the existing salary increase formula."

It said that the agreement effectively resolves a dispute lodged by unions with regards to this component, with a commitment to implement the increase this month.

The University’s salary negotiations have been based on an agreed-upon formula of three components, namely:

  • An inflation-based cost of living adjustment (COLA)
  • A cost of living enhancement (COLE) based on performance, and
  • A market related adjustment

"This formula had previously amounted to increases averaging around 8.61%, which, in the current higher education context, is no longer sustainable," the NMMU explained.

"It is no secret that the last two years have been financially nightmarish for higher education institutions as funding and other issues were thrust to the fore, threatening their financial sustainability."

The NMMU added that it is currently burdened with a R69-million operational budget deficit before investment income and while plans are in place to drum up third stream income, the University has been forced to focus on the challenging issues of affordability and sustainability.

"Failure to do so would be of huge detriment to the institution and its people.

"In light of the above, coupled with a shortfall on student enrolment targets this year and the fees budget down by 2.5%, there was just cause for addressing affordability," the university said.

"Not doing so could result in greater deficits than the R73-million from operations before investment income forecasted for 2018.

"Cognisant of the present challenges, the University had to pull off a tough balancing act in order to ensure that it stays afloat, while seeing to it that hardworking staff are remunerated in line with inflation trends.

"The University is pleased that the agreement was reached amicably and in time to effect the increases at the end of this month."