Abstract
Background: Aganang Local Municipality (ALM) was disestablished, and its municipal area was amalgamated into Blouberg Local Municipality, Molemole Local Municipality and Polokwane Local Municipality on 03 August 2016. The municipality was disestablished with a view to optimise the financial viability of municipalities in the Capricorn District Municipality. This development brought about challenges in a variety of areas as the move meant merging of the disestablished municipality to the other three municipalities.
Aim: This article explored the underlying human resources management problems that emanated from the disestablishment of ALM. The guiding question for this article was what are some of the salient human resource management challenges that emanated from ALM’s disestablishment? In addition, what lessons can be drawn for future municipal disestablishment exercises?
Setting: The setting for this study was the Polokwane Municipality, South Africa.
Methods: A qualitative approach, with interviews being the major data-collecting instrument, was applied.
Results: A key finding of this study is that there is a general dissatisfaction among staff from Aganang Municipality who were moved to Polokwane Municipality (PM) because of disparities in remuneration between them and their counterparts working for PM.
Conclusion: A major recommendation proffered in this article is that all human-resource-related issues need to be ironed out with staff members of the disestablished municipality before they are moved to other municipalities. This assists in minimising labour disputes in the merging process.
Keywords: municipality; disestablishment; merging; human resource management; Aganang Local Municipality.
Introduction
This article characterises employees’ perspectives from the context of organisational mergers at the South African local sphere of government. Globally, the management of employees in workplaces, commonly referred to as ‘human resource management’ (HRM), during disruptions or changes resulting from an organisational merger remains a huge challenge. This is not surprising because the impact of organisational mergers on employees has been largely ignored in the academic sphere, let alone the perspectives of employees on the subject (see Lawlor 2012; Ncube & Monnakgotla 2016; Ndlela, Thakathi & Adewale 2019; Slack & Bird 2013; Suzuki & Sakawu 2016; Tavares 2018). Therefore, this empirical study utilises a municipal merger case of South Africa’s Aganang Local Municipality (ALM) and three other local municipalities within Capricorn District Municipality to fill this apparent void within academia. Whilst limiting itself to staff absorption and related issues, the current article aims to expose underlying HRM challenges with the following objectives:
- to establish the salient HRM challenges that emanated from the Aganang Municipality’s disestablishment
- to understand the involvement of unions and their roles during the merger process
- to proffer lessons that can be drawn for future municipal disestablishment exercises.
Local government and mergers in South Africa: A background overview
The establishment and disestablishment of municipalities in South Africa can be hinged on pre-1994 developments. This is because the history of the local government is often intertwined with the previous system of apartheid. Under this system, the government at that time, which was led by the National Party, represented values, missions and aspirations of settler colonialism. Manyaka and Madzivhandila (2013) agreed, adding that at the heart of this apartheid system were racially biased policies, under which service delivery provision was mainly biased towards the white minority over the black communities, which were in majority. An immediate recollection of the past points to 1652, when the Dutch colony established Dutch East Indian Company (DEIC), which was later converted into a municipality of the Cape and came to be later known as ‘Good Hope’ (South African History Online [SAHO]). This was the first municipality in history. However, Spilhaus (1966) revealed that all colony-based municipalities were not established to service the general population, like any public institution would do, but were established for commercial purposes. This can be confirmed when looking at the purposes of the very first (Good Hope) municipality in the Cape, which were to strategically serve agricultural products and to render hospitalisation services to Europeans and Asian sea traders. It operated like its former prototype, the DEIC.
On 31 May 1910, a constitution of the union which embodied racial laws that deprived the majority black people of voting rights and leadership roles in government structures was passed (Nkuna & Shai 2017). It is noteworthy that this constitution was a product of the organisational merger or amalgamation of four colonies, namely, the Cape colony and Natal, which were dominated by the British, as well as Orange Free State and Transvaal, which were dominated by Afrikaners (see Byrnes 1996). In this regard, it was noted that, in every historical epoch that seeks to contextualise the South African local government, there are consistent outcomes accounting to the fact that no local authority or any form of authority was formed with the intention to promote democratic values or at least encouraged equal participation in the decision-making process (see Khan et al. 2016:72–73; Republic of South Africa 1998a). However, it is also crucial to emphasise that these apparent apartheid settings and subsequent practices lasted only for 332 years since the arrival of the settler colonists in 1652. In 1994, the new democratic government led by the African National Congress (ANC) got incepted. According to the 1994 election manifesto, promises and policy intentions of the ANC (see ANC 1994:n.p.; ANC Ready to Govern 1992), it became necessary that the local government and government in general had to undergo radical transformation in order to address the past injustices. Using the interim Constitution of South Africa (1993), a local government negotiating forum was introduced to ensure that the local government underwent the envisaged transformation. Indeed, the period 1994–2000 marked the formation of the democratic local government in South Africa (Department of Cooperative Government and Traditional Affairs [COGTA] 2009).
The pre-interim phase of the transformational local government, which took place in 1995, led to the election of temporary non-racial councils, commonly known as transitional councils (TLs). The TLs consisted of different representations from various communities and political, labour and other organisations. It is under this phase that the Local Government Transition Act (LGTA), Act 5 of 1993, was deemed imminent.
The interim phase, which began on 05 December 1995, recommended the amalgamation of the pre-1994 local government structures. To achieve this, Section 10 of the LGTA was used to establish 843 transitional metropolitan, district and local councils (Sekhukhune District Municipality n.d.). The policy instrument, such as the Municipal Demarcation Board (MDB), which is responsible for monitoring municipal performance and determining or re-determining municipal disestablishment, amalgamation or mergers, was also recommended under this phase.
The final phase saw a cementation of the new local government policy frameworks, such as the introduction of the White paper on local government (Republic of South Africa 1998a), Municipal Structures Act (MSA) of 1998 and many others. According to Part 1, sections 2 and 3 of MSA (117 of 1998) (Republic of South Africa 1998b:1):
Category A municipalities [Metropolitan], have exclusive municipal executive and legislative authority in their areas of jurisdiction; category B [Local] municipalities share municipal executive and legislative authority in their areas of jurisdiction with the category C [District] municipalities; and category C municipalities have municipal executive and legislative authority in the areas that include more than one Category B municipality.
This includes the mandate or objectives of the local government as clearly outlined in Section 152 (1) of the new Constitution (1996) given as follows:
- to provide a democratic and accountable government for local communities
- to ensure provision of services to communities in a sustainable manner
- to promote social and economic development
- to promote a safe and healthy environment
- to encourage the involvement of communities and community organisations in the matters of local government.
Despite these, one of the major achievements of the final phase was the democratic municipal elections held on 05 December 2000, which produced 6 metropolitan, 47 districts and 231 local municipalities, making it 284 municipalities in total (MDB 2005). In the diagnostic report, the Department of Provincial and Local Government, now known as COGTA (2009:1), mentioned that:
[O]ne of the greatest challenges South African municipalities had to deal with after the merging of 843 municipalities in the post 2000 municipal elections involved human resource practices such as alignment of the remuneration grading and conditions of service dispensations.
Furthermore, Auditor General South Africa (AGSA) 2009–2010 (AGSA 2009) reported that almost two-thirds of the rural-based municipalities were set to be de-established after the 2011 municipal elections.
As usual, diminishing and unsustainable financial viabilities were identified as the main cause for the projected disestablishments. Arguably, because of the deepening conditions of the socio-economic problems that unavoidably affect municipal revenue collection, there is no doubt that most rural-based municipalities in South Africa are likely to fail in the realisation of a developmental local government, and such municipalities become susceptible to mergers (ANC 2010; Manyaka 2014). Indeed, after the 2011 municipal elections, most municipalities were rationalised and reduced to form 278 municipalities, which was further reduced to 257 after the municipal elections that took place on 03 August 2016 (Municipal IQ 2016; Statistic South Africa [Stats SA] 2018). The subsequent section briefly recaps the eventual chronology of the establishment and disestablishment of the currently defunct ALM.
Prefacing the defunct Aganang Local Municipality: What happened?
According to the National Treasury (cited in National Treasury n.d.:1) and ALM final Integrated Development Plan (IDP) (2010/2011), ALM was categorised under B4 municipalities – meaning that it was 100% rural and largely depended on national grants such as Municipal Infrastructure Grant (MIG) and other subsidies to deliver basic services.
Whilst 57.48% of the municipal population was women, 57.37% of the entire population was not working and had no income (Mashiachidi & Moeti 2016). Financial performance of the municipality on the other hand was not encouraging. This is because in about five consecutive financial years (from 2010 to 2015), ALM received ‘qualified audit’ opinions (see AGSA 2010, 2011, 2015). Therefore, what happened is that, in 2015, the Department of COGTA, which was led by former Minister Pravin Gordhan, classified a considerable number of municipalities as dysfunctional and unviable. Of these, he identified 22 municipalities that, according to COGTA’s capacity assessment outcomes, qualify to be disestablished in line with Section 22 of the MDB Act, 27 of 1998. Table 1 summarises Limpopo province’s municipalities affected by boundary determination, including ALM. Consequently, on 03 August 2016, ALM was disestablished and its municipal area was merged into Blouberg Local Municipality, Molemole Local Municipality and Polokwane Local Municipality with a view to optimise the financial viability of municipalities in the Capricorn District Municipality (MDB 2018).
| TABLE 1: Limpopo province’s affected municipalities by boundary re-determinations for 2016. |
In addition, COGTA (2009, 2015, 2018) identified cases of misaligned salary structures and benefits, and staff placement as critical human resource challenges that confronted almost all merged municipalities in the post-2000 municipal elections. Employment statistics show that at the time of disestablishment, ALM had a total number of 242 employed personnel, excluding elected officials (Municipalities of South Africa n.d.:1). Therefore, the decision to disestablish the municipality in 2016 meant that the 242 employees had to be properly placed into the other four municipalities (National Treasury n.d.:1).
Policy context for municipal mergers: An overview
Management of employees in South Africa, particularly after the inception of the democratic government in 1994, has been done within the parameters of law and policy. In the context of municipal mergers, the legislative prescripts are indicated in Table 2.
| TABLE 2: Policy and legislative framework guiding municipal mergers in South Africa. |
Legislatively, Sections 152 and 155 of the Constitution of the Republic of South Africa (1996) coupled with Section 21 of the Municipal Demarcation Act 27 of 1998 explicitly allow for disestablishment and establishment of (newly combined) municipalities but, at the same time, caution that such development must seek to rationalise, remedy or improve municipal service delivery-related matters. In light of the cited legislations, mergers should be seen as a crucial administrative reform to advance both legislative and development objectives (Karkin, Gocoglu & Savas Yavuzcehre 2019; National Treasury 2014).
Hence, it should be emphasised that municipal mergers are always conducted with a view, amongst others, to optimise municipal financial viability and, in some cases, to expand municipalities for ‘Metro’ status (MDB 2018; Slack & Bird 2013). During the pre-integration merger phase, representative unions (Independent Municipal and Allied Trade Union [IMATU] and South African Municipal Workers Union [SAMWU]) must enter into an agreement at the South African Local Government Bargaining Council (SALGBC) (COGTA 2009:65). This is to ensure that employees are protected from any unwarranted conduct of the employer and exploitative actions. The agreement often covers the following issues: scope of application, definition of participants and exclusions, date of transfer of employees, conditions of service and benefits, dispute resolution and others.
Problematising organisational mergers and human resources management: Literature review
Throughout the world, particularly in the private sector, mergers have been regarded as a highly desired organisational strategy under which sustainability, profit maximisation and efficacy in service delivery can be realised (Belley 2012; Bryson 2003; Goto, Sekgetle & Kuramoto 2019; Kumar & Bansal 2008).
The contextual usage of the concept ‘merger’ in this article is put forth by Letaifa (2017), who defined municipal merger as the process of combining assets of two municipalities to form one municipal entity that is more formidable, efficient and effective than the previous or the defunct. Literature offers two sets of merger patterns, (1) creation of a new municipality and (2) municipality absorption. The first pattern is clarified by the National Treasury (2014) as one that involves creating a new municipality out of a combination of more than two municipalities whereby the previous municipalities cease to exist. The second one, which is considered for the purpose of this article, involves a case where one core municipality absorbs its merger partners, ‘with the legal personalities of the merged partners being lost and the legal personality of the core municipality remaining’ (Suzuki & Sakuwa 2016:228).
From the perused literature (Bryson 2003; Schmidt 2002; Wright 1975) it is understood that there is a strong link between HRM and organisational mergers. This link can be traced to the question ‘why do mergers fail?’ This question is briefly answered by Bansal in Lawlor (2013), who said that ‘mergers fail because of people’. The need to manage people led to the emergence of the concept HRM, which was later accepted as a global practice at workplaces (Swanepoel, Erasmus & Schenk 2008). The same applies to when organisations decide to merge; the fact that the human aspect cannot be exempted from the merger effects or changes indicates that HRM practices will always assume the centre stage.
According to Brueller, Carmeli and Markman (2016), HRM deals with different human or organisational issues ranging from administrative task, recruitment, payroll, compliance, organisational cultures and leadership.
However, what is interesting about HRM practices is that they are based on policies and procedures established to regulate employee–employer relationships (Budd & Bhave 2019). In other words, as Kaufman (2007) stated, HRM should be viewed as a generic activity that involves managing other people’s labour in production. He further explained that (Kaufman 2007):
HRM goes back to the dawn of human history. The first visible roots of the HRM as practiced today in the modern business organisations appeared in the late nineteenth century more or less contemporaneously in England, France, Germany, and the United States. Japan experienced a broadly similar development a decade or so later. (p. 34)
Taking cue from this, it is important to emphasise that the goal of this article is not to demarcate between issues, functions or practices of HRM but to gain valuable insights for the purpose of contextualising and understanding employee challenges affixed to organisational changes and mergers.
In the study ‘Managing HRM risks in a merger’, Bryson (2003) underscored that mergers provide a fertile ground for unfair treatment, job insecurity and administrative or procedural injustice. For Madondo (2008), this was not surprising because when organisations merge, one of the biggest challenges is to accommodate all people into the new organisation. Coffey, Garrow and Holbeche (2002:29) concurred with the latter, warning that any approach (during mergers) that seeks to second-rate the employees at the expense of any other desired merger outcomes could be disastrous.
Flowing from this, Burke (1988) observed that the affected employees often suffer from common psychological consequences, which include anxiety and uncertainty. According to Taylor, Austin and Caputo (1992):
[T]he more the response and coping capacities of employees are impaired, leading often to feelings of depression, lowered motivation and productivity, reduced organizational commitment, antagonistic or disruptive behaviour, dysfunctional physical symptoms, absenteeism, and resignations. (p. 38)
Municipal mergers: Some human resources management implications for municipalities
For the merged municipalities in South Africa, part of the implications is that ‘unresolved HRM problems have led to increased intra-municipal labour revolts that almost weakened organisational cultures in most municipalities’ (National Development Planning Report 2011). Despite that, very little is known about the HRM approach and criteria used by municipalities when absorbing other municipal assets, as is the case with Aganang Municipality. In this regard, Chetty (2010) raised concerns over the suspicious manner in which municipalities handled merger transitions. The author contends that if employees were prepared and consulted, resistance and problems in the post-mergers, as noted in Raymond Mhlaba Municipality and other 142 municipalities across South Africa, would not have surfaced (COGTA 2009; Municipal IQ 2018; Ndlela et al. 2019; NDP 2011). Regrettably, a common trend is that these problems have negatively affected in part, if not whole, the legislative and organisational performance of the newly merged unit, faculty, department or municipality in the said municipalities. However, it is believed that effective HRM practices can be developed as a way to mitigate the apparent merger problems (Allam 2017).
The literature further acknowledged difficulties in avoiding or controlling entirely the responses of the psychologically affected employees during merger transitions; hence, organisational scholars such as Buono, Bowditch and Lewis (1985) suggested systematic communication between management and employees as the ultimate control mechanism. Maubane and Mothapo (2020) regarded communication as the important determinant tool for success in solving the problem or managing issues. Coffey et al. (2002) and Madondo (2008) agreed, arguing that this mechanism may not be perfect to address all mergers’ problems but is crucial for the successful mental preparedness of employees as it is more concerned with how employees react to change than any other affected facet of the organisation.
Human resource management during merger phases
In an attempt to locate and understand the HRM aspects and some related challenges during pre- and post-integration of employees, this article considers the merger life cycle that consists of three phases, as proposed in the literature (Holbeche 1998; Taylor et al. 1992). According to Holbeche (1998), all mergers go through various stages. The author identified three stages or phases, namely, pre-merger, immediate transition and integration phases. Abstraction of these phases is shown in Figure 1.
Pre-merger is the initial stage, and it involves the process of planning the merger. It is argued that at this phase, management should consider making human resources due diligence (Madondo 2008). As noted in the Fetakgomo-Greater Tubatse merger case, establishment of change management committees including Human Resources Management Committee is done here. These committees must be composed of unions (as the overseeing body) and responsible unit managers from the outgoing and the absorbing municipalities (Fetakgomo-Greater Tubatse Newsletter, Online). The South African Local Government Association and the existing unions are entered into the Collective Bargaining Agreement. This shall guide, amongst others, the process of integrating employees into the new municipality. Municipal Structures Act of 1998, Section 12(4), charges that consultations should take place between the affected parties, including the employees, during establishment or disestablishment of municipalities. At this phase, responsible bodies for the merger (municipalities, South African Local Government Association [SALGA] and MDM) chart a way forward, including fixing existing organograms for the placement of the disestablished municipality. This includes merging of job posts, salaries and units. Empirical study conducted by Taylor et al. (1992:39) found that in this phase ‘degrees of environmental uncertainty (technological market, socio-political) may vary, but respective organizations are relatively stable and members are relatively satisfied with the status quo’. Holbeche (1998) concluded that challenges and future prospects are brought forward, and psychological preparedness is achievable at this phase through the established committees.
The second phase, also known as the immediate transition, is concerned with legal issues such as labour contracts and related HR. Transfer of assets and gradual movement of things begin here. Research indicates that a labour consultation process, as a key merger driver, could lead to harmonious relations between management and employees, as well as decreased negativity towards the merger changes (Jansen 2003). This phase is not necessarily different from its predecessor phase in that, apart from formalising structures, the intent is still to forestall anxiety, which produces unnecessary rumours and inaccuracies (Mathebula 2018; Van der Merwe 2007).
The last phase, integration (Figure 1), which is crucial for the purpose of this article, includes merger absorption, which means that there is a mass physical movement of resources from one municipality to another. Basically, employees are integrated into the new or core organisation. Training is important at this stage because the new employees must adapt to the organisational culture and get acclimatised to the technological systems of the new municipality. According to research, this phase is characterised by ‘high organisational instability’ and ‘lack of cooperation’. ‘“We-they” mentality exists; violated expectations lead to intra- and inter-unit hostility; structural ambiguity decreases but cultural and role ambiguity remain high; dissenters leave the organization’ (Taylor et al. 1992:39). Bhebhe (2020) added the possibility of experiencing employee disengagement. According to the study, open and transparent human resource practices are highly recommended to manage the psychological merger process.
Therefore, it is clear from the foregoing context that the HRM–employee nexus and the employee–union linkages (which often hinders the HRM-based individualistic approach in dealing with employees) are also unavoidable features in modern-day mergers, especially in the South African public sector, where the practice of unionisation is constitutionalised. This, therefore, triggers the following questions: How is the involvement of unions helpful during mergers and what exactly is the role of unions during mergers?
The role of unions in mergers
Similar to the subject of mergers and HRM, this article found that there are very limited academic reflections on the role and involvement of unions during mergers. In one of the few contributions, Bryson (2003) started by invoking the question: ‘Are Unions not present and therefore not involved?’ To suggest that HRM is anti-union is a misconception of some sort and is equivalent to concluding that unions have no role during organisational mergers. The latter argues that unions’ presence and contribution (either negative or positive) during organisational changes are crucial. In the same vein, it should be acknowledged that unions’ presence by existential nature guarantees greater assurance to holding management accountable, ensuring transparency, procedural fairness and advocacy for their membership in the whole process of merging, absorption or disestablishment (Bryson 2003). Labour court cases such as Johannesburg City Parks and ZOO SOC Limited versus SAMWU edify the significance of unions during mergers. This case was about the 2013 merger between Johannesburg City Parks and Johannesburg Zoo (both are municipal-owned entities), whereby employees through SAMWU raised dissatisfactions about the job grading which effectively affected job titles, remunerations and posts in the entities (SAFLII 2018:1). In South Africa, the inclusion of unions during mergers is foregrounded in the policy contexts of the local government. For example, issues relating to human resources, such as salary structures, are presented and ratified by the SALGBC in line with the Labour Relations Act of 1995, Basic Conditions of Employment Act 75 of 1997, Skills Development Act of 1998 and Organisational Rights Collective Agreement of 2005. Parties to this agreement and the SALGBC are SALGA, IMATU and SAMWU (COGTA 2009). Thus, during merger transitions, unions play an oversight role and are often represented in almost every ‘Change Committee’, such as the Municipal Cooperate Committee (Greater Tubatse-Fetasgomo Municipality, n.d.).
Research methodology
Research methodology deals with the way in which research is planned. According to Brynard, Harnekom and Brynard (2014), researchers who aimed to obtain descriptive data from the research objectives must follow a qualitative approach. Indeed, this article applied a qualitative approach that is supported by both theoretical and empirical techniques. Theoretical technique included collection and analysis of the existing literature, such as books, journals and government publications (Creswell 2014). This was crucial for understanding the contextual discourse on municipal merging and HRM. Empirical technique, on the other hand, involved the use of interviews to collect first-hand information from the selected employees. Initially, face-to-face interviews were scheduled. However, because of the National Lockdown restrictions that were announced at the time this study was conducted, researchers had no choice but to use telephonic interviews (Mazwi 2020; South African Government, Online). Telephonic interviews, according to Phakathi (2016), are mostly preferable in cases where participants chose to remain anonymous. Considering that the investigated matter was still sub-jury care when this study was conducted, the technique was helpful in that it increased participant’s confidence and allowed anonymity of responses.
Furthermore, the population in this study consist of three groups, namely, unit managers, union member(s) and lower-level officials, in the defunct ALM. A mixture of purposive and snowball sampling methods was used to select 10 participants out of the population of 242 (National Treasury n.d.:1). The sampling method was necessary because of the assumption held by the researcher(s) that only the former employees of Aganang Municipality would know who was integrated where in the other local municipalities within the Capricorn District Municipality. The manner in which the population was abstracted in this study further assisted in strengthening the validity of the research results in that the collected data from literature, unions and other officials were triangulated (Creswell 2014).
General findings and discussion
Characterisation of the participants and demographic overview
The interview guide used in this article contained two sets of questions. Unlike the second set that gathered descriptive data from the participants, the first set aimed at finding out about the employees’ demographical information, which included, amongst others, gender, educational qualifications, previous and current position, and pervious and current municipality of the participants. To this effect, it is important to emphasise that all participants were former employees of ALM. Of the 10 interviewed participants, only two were placed in Molemole and Blouberg municipalities and the rest are working at Polokwane Municipality (PM). This outcome corroborates the MECs Provincial Notice of ALM Amalgamation gazetted in 2015, which directed that two-thirds of the employees shall be placed in PM. Most of the employee titles were affected by the changes, with almost all, particularly those currently placed at Polokwane Local Municipality, indicating that their current positions are much lower in terms of salary grades as compared with their previous occupations at ALM. Only the few who went to other municipalities (Molemole and Blouberg) sustained same positions, with no changes made to their salaries as well. In this regard, five participants revealed that they held managerial positions, whilst three were previously appointed as assistant managers and the other two as clerks. The study was conducted with a total of 10 participants who are currently placed in Blouberg, Molemole and Polokwane; there were eight female and two male participants. Despite unequal gender representation, half (five) of the participants hold a degree as their highest qualification, whilst two have diplomas and the remaining three have only certifications.
The second section of the interview guide addressed perceptions of the employees. This section consisted of two phases that were theorised by Holbeche (1998) as pre- and post-merger phases. The first one looked at the processes, developments and preparation of Aganang employees for the changes due to the merger. The second phase, which is post-integration, covered issues related to the placement of former employees within the absorbing municipalities, that is, Molemole, Polokwane and Blouberg. The following themes were extrapolated from the interview transcriptions.
Pre-merger integration phase
Theme 1: Impact of the municipal absorption or merger on employees’ personal growth
Participants were asked whether they can regard the ALM disestablishment and subsequent integration of employees and other assets into another municipality as an opportunity for growth. The question is based on the pre-merger integration phase. Overall, participants’ responses can be described in twofold:
- Sadness and nostalgia (negative) – in a sense that the participants have worked at ALM for many years, so their attachment to the area and community stakeholders has grown considerably. They also indicated that there were future plans for development and service underway that faded away. For example, in one interview, a participant said:
‘… look, I didn’t want to leave this place for another municipality … I was looking at the cost of moving, the daily expenses I mean from where I stay [around the ALM area] to Polokwane is about 45 kilometres and I really cannot afford, am suffocating already. Moreover, now we had plans to develop that area it meant end of road.’ (Former ALM official, male, Waste Management Unit)
- Happiness and growth (positive) – in a sense that participants were overwhelmed by the feeling of moving into a new environment where greater opportunities for growth prevailed. The excitement and growth outlook, as a source of attraction, was captured by one participant:
‘Working for City of Polokwane exposes us to different sectors of work field as the municipality consist of urban, semi urban and rural areas. We have an opportunity to work with different stakeholders; looking forward to achieving different goals in one project. One project can target service delivery, local economic development, revenue collection and employment creation. Aganang Municipality: it was only focusing on service delivery at rural areas and employment creation. Polokwane Municipality has various ethnic groups with different opinions, so we address issues differently unlike at Aganang with only one or two ethnic group. Polokwane has different business sectors and forums that are monitored by different sections of the municipality and we are learning a lot.’ (Senior official in the LED Unit, female, City of Polokwane)
Notably, this participant was open to new opportunities and changes. To some considerable extent, this is important because, in Swanepoel et al.’s (2008) view, employees must also give in to overcome the natural phobia affixed to changes. Of course, this may not always be the case, and it may take a while for some employees to acclimatise to organisational changes.
In all responses, employees shared their concerns regarding the manner in which they came to know about the ALM disestablishment. A general feeling is that consultation with employees was not done appropriately, with employees citing that they knew about the decision when it was communicated to external stakeholders, which, according to the organisational culture, employees should have been informed first before everyone. Goddard and Palmer (2010) agreed with participant’s organisational culture, adding that a strong organisational culture is dependent on the communication approach between employers and employees. It is clear that the ALM management’s approach on the announcement was unusual and perplexing.
Whilst in the pre-merger phase, participants acknowledged the existence of Change Management Committees, which, amongst others, were Political, Human Resources, Placement, Records and Appraise Committees.
However, the interviewed union representative revealed that attendance in the committee responsible for doing placements was characterised by a lack of commitment on the part of managers or crucial members in that they would delegate or send junior staff members who could not make immediate decisions. This, according to the former HR personnel, was to ‘buy time and get attendance register signed so that they delay everything knowing as they (management) knew that decisions are already made somewhere else’. Some participants also accused the ANC-led council for making political decisions without considering labour constituency. For example, one participant explained that:
‘This decision to disestablish ALM is because the current majority party in Council has lost some wards to opposition. So it’s a strategic move to sustain political ground over some wards. As we speak, aggrieved workers, particularly in Polokwane have filed court papers and some had gone to Office of the Public Protector to complain about the whole merger process which was not done for good reasons.’ (Former ALM employee, male, junior official)
Post-merger integration phase
Theme 1: Factors behind dissatisfactions of former Aganang Local Municipality employees
Participants were also asked to characterise their integration into the new municipalities and further share sources of dissatisfaction. Most participants, especially those who were placed in Polokwane, indicated that their integration was marred with a mixture of trepidation and unfair treatment from the incumbent officials. One participant said that employees in Polokwane still view them as an outsider, and heard them calling them that one of Aganang, and it did not sit well with them. This, according to Lawlor (2012), is discouraging and unwelcoming. Box 1 summarises factors identified to be the cause of dissatisfactions in the whole merging process of ALM.
| BOX 1: Summary of the factors behind employee dissatisfactions. |
In almost all the interviews, participants confirmed the dissatisfactions listed in Box 1. Demoted participants expressed their frustrations as follows:
‘… uhm Arthur [researcher name], firstly I can say to you, we were not placed according to our previous job titles, our qualifications did not matter. Secondly, the process was so spiteful that some of us, because of our union affiliation, were demoted … I can tell you … due to this process which is unfair and the amount of stress, some of our colleagues are no more [deceased] as we speak … [sigh] … [sigh]. It’s an emotional journey, we are in court because of this.’ (Former ALM manager, City of Polokwane)
The Collective Bargaining Agreement (2016) for this merger case stated that the process of placing employees into the new council-approved structures of municipalities is going to ensure employment security and retain job levels but not necessarily job title and content. One participant said:
‘I wish I can just get another job because this thing of mergers is a bad idea. Look … from IT to Waste Management Unit … where is sense there? Am now doing things I don’t know because the management failed to manage this merger process; it’s a gambling sort of. I took them to court. Where I am currently placed in this section, I was never formally trained or orientated till today [at the time of interview].’ (Former IT Technician, City of Polokwane)
‘Uhm … I cannot say it is an opportunity for growth for me because when they first informed us about the idea … they didn’t have open vacant nor plans to place us so this brought a huge uncertainty as to … like really what is happening here. At the beginning, they gave me an appointment letter stating one thing but a night before integrating us I was given another appointment letter saying am going to be clerk. It’s official that I am demoted.’ (Former Unit Manager, City of Polokwane)
In light of these responses, it can be deduced that the manner in which the ALM merger was handled affected the employees in a negative manner. It is also clear that the affected employees’ emotional well-being will not be the same again. Other studies, such as those by Taylor et al. (1992), concluded that the aggrieved employees may need some psychological coping mechanism to deal with the apparent distraught, further arguing that it is difficult for emotionally impaired employees not to disengage or to at least become effective.
However, findings also reveal that employees who went to Molemole and Blouberg municipalities did not experience problems during integration because the two municipalities already had open vacancies that were budgeted for, meaning that the ALM employees were placed in the organogram. Another key finding is that when employees were moved from a smaller institution and merged into bigger institutions (ALM to PLM ), there were challenges, but when they were moved to smaller municipalities (ALM to Blouberg), there were little or no challenges.
Theme 2: Practices for alleviating employee dissatisfactions
In all responses, participants demonstrated knowledge of the relevant policies, legislation and processes to be followed when a municipality is disestablished. A common view was that the management, particularly in PM, chose to ignore the Policy Framework which includes MSA of 1998, MDB Act of 1998, Basic Employment Conditions Act, Labour Relations Act, 1995 and the Collective Agreement on the Transfer of Staff signed between SALGA, IMATU and SAMWU on 15 August 2016. (This Agreement was made available for the authors to review).
The date of signing this apparent Collective Agreement might also reflect some backlogs from the closed doors, in that this, according to MEC of COGHSTA notice gazetted, was supposed to be finalised before the announced municipal election date (03 August 2016). A union representative of one of the receiving local municipalities (who did not want to name his current employer citing anonymity) indicated that:
‘The process was haphazard in that SALGA, Capricorn District Municipality and MDM were not active practically and they just wanted to see people moving … but there was no plan.’ (Union representative, male)
In addition, participants also indicated that the management was only interested in de-establishing ALM because it was an instruction from their principals, but they paid little attention to the employees. The process appears to be a top-down one, and there is no room for bottom-up influence. It is largely for this context that the aggrieved employees reported the matter to their unions’ provincial structures, Office of the Public Protector and the Labour Court. Another participant revealed that:
‘Some of us … are learning that our colleagues whom we filed the case together have decided to drop the court case … but rumour has it that they were promised promotions and salary increases. Some of them have agreed to have their relatives employed in the municipality in exchanging. It’s tough.’ (Junior official, female, City of Polekwane)
Based on this apparent revelation, one can deduce that the employer is admitting to have caused the employee dissatisfaction by trying to reach settlement outside of court, but at the same time, such a settlement method is at fault with a legislative framework on human resources management. With that being said, it was also shared that employees were not subjected to formal training and that merging of the filing system was not done. For example, the filing system of Polokwane and ALM is not the same and therefore required some merging. In the interest of transparent filing of employees, there was a need to discontinue the old system and start afresh on a new system that is inclusive of everyone.
Synthesis of the findings
Whilst there is insufficient literature that specifically speaks about the impact of organisational mergers on employees within the context of municipalities, most of the perused studies focused on the impact of mergers on service delivery and financial capacity of municipalities (Ncube & Monnakgotla 2016; Tavares 2018). Thus, by limiting the current study to HRM issues and related challenges employees face during an organisational merger, whereby the disestablished ALM was used as the case study, the authors sought to address the existing gap in literature.
From the findings of this study, there is a wide acknowledgement of the benefits associated with the idea of municipal mergers or amalgamations. This confirms similar research conclusions on the notion that municipal mergers provide a fertile ground for employee growth, increased institutional capacity and strengthened financial base (Slack & Bird 2013). The merger could influence employees’ growth in a sense that the disestablished municipality, ALM in this case, only had few rural-based wards to service, whilst at the City of Polokwane which is semi-urban, the new employees are exposed to a new environment, servicing various ethnic groups, different stakeholders and bigger projects, inevitably impacting one’s growth (Lawlor 2012). Although there were other employees who went to Blouberg and Molemole municipalities, which are not necessarily offering bigger opportunities as compared to the City of Polokwane, interviewed participants in these municipalities indicated that moving to a new environment and adopting the new culture of doing things instilled more than a sense of change in them.
It is important to highlight that some participants lamented the impact of the apparent merger on physical location, confirming findings made by Burke (1988), who identified the possibility of a ‘transfer to a new location, as a result of a merger, as being one of the sources of stress and uncertainty for employees’. Other researchers concluded that this area warrants research because of the limited academic reflections (Brief & Weiss 2002).
Furthermore, findings reflect that employee’s needs were negated during municipal merging owing to pay disparities and mismatched job titles. Such errors from the HRM point of view often cause employees to feel less important, thereby making them easily disengaged from organisational activities (Bhebhe 2020; Bryson 2003). It is not surprising, therefore, that the aggrieved former ALM employees resorted to Labour Court and Public Protector for recourse. To this end, some of the consequences that the affected employees endured in the process included loss of lives, depression, demotions, uncertainty and salary reduction. Thus, a major finding in this article is that human resources issues, such as salaries, placement and job description, should be ironed out before the disestablished municipality’s assets and employees are moved to the newly merged or absorbing municipality, as was the case in this study.
Findings also suggest that the policy framework was not followed. It can be noted from the participant’s responses that the process of disestablishing ALM did not follow correct legislative procedures such as Skills Development Act of 1998 and other related laws. For example, one participant said ‘where I am currently placed in this section, I was never formally trained or orientated till today’ (at the time of the interview). In the interest of organisational culture, Jansen (2003) concluded that training and orientation is sacrosanct for the settlement of new employees. Results show that training was done only for participants who went to Blouberg and Molemole municipalities.
In the findings of this study, the following factors were identified as the main sources of employee dissatisfaction in the whole process of ALM disestablishment: placement of employees done in the existing organisational structure of the receiving municipality; lack of openness, transparency and consistency in the pre- and post-integration processes; poor communication between employer and employee; no merging of posts owing to pay parity and mismatched units, and no proper training for the new employees coming from the disestablished municipality. According to COGTA (2009), responsible structures should lay down plans to develop uniformity between the remuneration frameworks of local government, thereby aligning payment methods of the disestablished and the newly established. This, however, cannot be achieved in cases where the organisational structure of the absorbing municipality is not reset to accommodate the incoming employees. As such, the following items in the organogram of the receiving municipality should be subjected to merging: pay system, filing system and job titles.
Conclusion and recommendations
Findings from both a literature search and interview correspondence with the affected employees of the now defunct ALM rue the failure mergers produce, citing the significance of managing employees’ needs and related issues long before the actual merger processes occur, that is, to conduct employee and stakeholder consultations (separately and jointly), to prepare and acclimatise employees to the planned merger changes, and to involve employees in each and every step of the process (transparency). Thus, the article proposes the steps for consideration when merging municipalities. Firstly, the management should solicit views of the employees, unions and other municipal stakeholders on the planned merger changes. Secondly, reset the existing organisational structure with a view to align placement of employees and match or merge job titles, salaries and names of internal departments or units of the newly merged municipality (this shall also apply to merger absorption depending on the number of employees and available vacancies in a municipality). This study found that in some cases the municipality that is absorbing another may have open vacancies suitable for incoming employees (as in Molemole and Blouberg municipalities), which then makes a complete reset of the organisational structure to instil the new organisational culture of the new municipality unnecessary. As the main recommendation in this article, the second step is discussed in detail.
Based on the ailing service delivery performance and the fading capacity of ALM participants, the Auditor General South Africa (2010–2011, 2014–2015) and MDB (2015) agree that the disestablishment of the municipality was necessary. According to the findings in this article, it is the handling of the merger process, particularly the decision to continue placement of new employees in the existing organisational structure of the receiving municipality, that contributed to employee dissatisfaction, whereas it has been proven challenging for the receiving municipality to adjust its existing organisational structure for the placement of the incoming employees; a total reset of the organisational structure was and is the ultimate method to allow proper and just alignment of job positions, titles and remuneration grading. The court case Johannesburg City Parks and ZOO SOC Limited versus SAMWU bears reference. City of Polokwane, for example, already had unplaced employees in its organisational structure before absorbing ALM (interview with participants). Thus, resetting its organisational structure was going to allow placement of the old and new employees.
As this article concludes, the following areas for research are recommended: extensive enquiry into the role of unions in shaping the merger process to favour employees; enquiry into the influence of local politics on municipal merger proposals; and specifically study the impact mergers have on the physical location of the employees.
Acknowledgements
Tshwane University of Technology’s Public Management Department and Office of the Rector (Polokwane Campus) are duly acknowledged.
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
W.T., A.S. and R.M. contributed equally to this work.
Ethical considerations
This article followed all ethical standards for research without direct contact with human or animal subjects.
Funding information
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data availability
The authors confirm that the data supporting the findings of this study are available within the article.
Disclaimer
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.
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