Johannesburg — WHILE a strike by municipal workers is set to continue for at least another day, gold and coal producers are more sanguine after last night signing a deal with unions on pay increases.

The municipal strike, which continued to take its toll on service delivery across SA yesterday, centres on disagreement on pay increases and benefits.

Unions are insisting on a 15% pay rise or R2500, whichever is the highest.

The South African Local Government Association (Salga) has raised its offer to an 11,5% increase now and a further 1,5% in January.

The strikes come amid annual salary negotiations across sectors and are not unusual for this time of year, but the tone and occasional violence accompanying some of the mass action has been criticised by the government and ruling party.

The unions are demanding inflation-related increases, arguing that the recession is biting into the pockets of their members. Companies say they cannot meet the demands, blaming global economic meltdown for smaller profits.

Although a strike was threatened at one stage during the three-month-long mining industry pay negotiations, members of the Chamber of Mines made an offer last week on increases for gold and coal miners, and the unions signed yesterday.

Colliery members of the chamber signed a two-year pay agreement with the National Union of Mineworkers, Solidarity and the United Association of SA providing for average increases of 9%-10%, except for entry-level workers, who will earn 11% more.

Frans Barker, who negotiated for the chamber on the coal agreement, said that this was the first time that chamber-level wage negotiations had been settled without being referred to the Commission for Conciliation, Mediation and Arbitration of SA. Last night, the gold industry pay agreement was signed.

Gold members of the chamber offered increases of between 9% and 10,5%.

Municipal trade unions will decide today whether they will continue with their strike.

The industrial action, by tens of thousands of employees, entered its second day yesterday with Labour Minister Membathisi Mdladlana condemning "acts of violence" that marked the start of the mass action.

However, both the SA Municipal Workers Union and the Independent Municipal and Allied Trade Union said that the strike had largely been peaceful.

The unions said they were not surprised with the utter frustration the workers had shown during marches as a result of years of local government being mismanaged.

Salga chairman Amos Masondo told reporters yesterday that those bargaining the new pay package were moving as fast as they could because there was a concern about the strike's effect on service delivery.

"We have moved with speed on this matter because of our concerns that the strike will have a negative impact on service delivery, in addition to the ongoing community unrest that has been experienced in some municipalities in our country.

"We appreciate that yesterday at least 60% of our essential service workers turned up for work, and we regret that 40% did not," he said.