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):

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:

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:

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.

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).

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).

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.

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.

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):

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):

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.

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?

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.).

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.