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Eskom offers up to 5.3% wage increase - way below workers’ demands

A photograph made available on 08 June 2015 showing an Eskom coal fired power station as the sun rises near Johannesburg, South Africa. Image, EPA, KIM LUDBROOK.

A photograph made available on 08 June 2015 showing an Eskom coal fired power station as the sun rises near Johannesburg, South Africa. Image, EPA, KIM LUDBROOK.

Published Jun 14, 2022

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South Africa’s embattled power utility Eskom which has been locked in wage negotiations with organised labour for the past month, is tabling an increase of between 4%-5.3% for about 30 000 workers at the state-owned entity in different pay grades.

The National Union of Metalworkers of South Africa (Numsa) met with Eskom management under the auspices of the Central Bargaining Forum (CBF) for the third round of wage talks from 6-8 June.

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Numsa said it had presented a revised offer and reduced its demand from 15% across the board, down to 12% across the board.

If Eskom were to grant a 12% wage increase across the board, it would cost R2.1 billion. This includes the costs of benefits such as pension, annual bonus, medical aid, overtime and leave pay for all 28 300 employees in the CBF.

Numsa said in a statement on Tuesday: “In comparison, Eskom keeps pleading poverty. It claims it cannot afford our wage demands. It has made an offer to increase income differentials instead.

“They have a staggered approach to deal with this issue. But it has not yet made an offer on the wage increase across the board. Instead, Eskom has made a final offer and it is broken down as indicated in the table below.”

Numsa went on to say, “It is very clear that the strategy that is being used by CEO Andre De Ruyter and the executive management of Eskom, is based on sacrificing workers benefits, pension payouts and wages in order to fund the bloated cost of primary energy.”

“These contracts benefit privately owned coal, IPP and diesel companies and they are escalating year on year at an alarming rate. In comparison, workers’ wages and benefits have remained flat over the last 5 years.

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“The total cost of the wage bill at Eskom, including the generous packages of the executive management has remained flat and has not exceeded R33 billion since the 2017/2018 financial year. We made a detailed presentation to Eskom where we explained why our demands are affordable.”

Numsa further said that workers were collapsing under the burden of the high cost of living, fuel price escalation and above inflation Eskom tariff increases.

Numsa goes after De Ruyter

“We have proven in our submissions to the CBF, that Eskom can afford our wage demands. The problem is that the current management led by the CEO Andre De Ruyter is grossly inefficient, and is wasting money, but it refuses to deal with its cost drivers.”

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“De Ruyter is undermining the Central Bargaining Forum - We must condemn Andre De Ruyter for engaging workers’ directly on their demands. De Ruyter is not engaging in the CBF but he is soliciting mandates directly on email.

“If he continues, we will collapse the CBF and bring workers to his house to negotiate directly with him on his expensive manicured lawns. He must stop undermining the central bargaining forum with internal communication,” Numsa warned.

Numsa said that Eskom had made its offer final and was unwilling to shift from its position.

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“We need to seek a new mandate from members on the way forward. Numsa members will have to decide on how to proceed on Eskoms staggered proposal to resolve wage differentials. The deadline to submit our response to the CBF is Tuesday 14 June. We will meet again for a fourth round of talks from 21-22 June.”

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