City of Cape Town employees signed up with the SA Municipal Workers' Union will be paid more than R25-million to address a discrepancy in the city's pension fund contributions since 2000.
The city and the union settled out of court following a long battle over a discrepancy in what the city was contributing towards individual employees' pensions.
The monies are to be paid to the workers' pension fund.
Samwu Cape Town regional secretary Mike Khumalo said the city had been paying a different contribution to its workers.
He said the city had been paying an 18% contribution towards some employees' pension funds and paying only 12% for others.
The money will be paid in two tranches - R14.6-million to cover the shortfall from 2000, and a further R11.3-million in late payment interest.
The money is meant to rectify that discrepancy, which was a result of the city not increasing its contribution when smaller municipalities amalgamated in 2000 to form the City of Cape Town.
"In May 2015 we had a meeting with the mayor and she agreed that it was unfair, 'let's correct it'," said Khumalo.
He said the development was a win for workers.
"But again, it is how you translate it.most provident and pension funds operate like business. It is possible that you will sit with the situation where the actual people who have to benefit from this get very little and the rest is pocketed by the pension fund," he said.
Khumalo said the city should have corrected the discrepancy back in 2000.
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