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Eskom calls union wage demands unaffordable in tense negotiation

Unions seeking between 9.5% and 15% increases for its members.
Image: Moneyweb

Eskom Holdings said the South African state utility is unable to agree to certain union demands over wage increases and declined to make an offer on basic salary until labor groups respond.

The loss-making electricity provider “cannot afford” proposals such as an improvement in pay inequality, according to a May 4 letter reviewed by Bloomberg. A request by unions to raise worker housing allowance has “no justification” and the required funds aren’t available in any case, the company said.

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Eskom has R464 billion in debt and is the most prominent of the government-owned companies burdening state finances, while regularly resorting to power cuts to keep the grid from overloading. The utility bowed to pressure from labor in 2018 wage negotiations after strike action, agreeing to a one-time cash payment and annual increases of at least 7%.

Read: SA seeks lesser of two evils with Eskom debt options

The utility “is not at this stage in a position to table a possible offer in terms of a percentage increase to basic salary, as this is dependent on the union responses to the above,” it said.

An Eskom spokesman declined to comment further.

Eskom’s biggest two labour groups, The National Union of Metalworkers of South Africa and the National Union of Mineworkers, are seeking wage increases of 15%. Solidarity, a smaller group, wants 9.5% increases for its members.

“They must give us an offer,” said Livhuwani Mammburu, a spokesman for NUM.

© 2021 Bloomberg

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Tell the unions to proceed directly to hell, do not pass go and do not collect R200.

The wages received by the members of NUM is just a glorified social grant or a form of unemployment benefit as part of vote-buying exercises by the ANC. It takes 6 of these overpaid clowns to switch a circuit breaker. They add zero value. They consume value. Privatize this mess to rescue the poor taxpayer who is forced to fund this imploding state monopoly.

Eskom depicts the insanity of communism where “workers” have more rights and privileges than citizens and consumers. These populist communists plunder the taxpayer and the economy to protect jobs at SOEs while they destroy jobs everywhere else.

This experiment in Central Planning by Luthuli House has turned into a disaster for the ANC and is fast bankrupting the entire country.

Well said; but essentially the unions have learnt from their “bosses” at Eskom; when you are a monopoly you can hold a country or company to ransom. It is extortion, plain and simple, like Eskom tariff increases.

I read a comment on this website recently that put this whole mess into context, how does a company with a monopoly on the provision of a basic service get into Eskom’s position?

How about demanding a 20% productivity increase or would this mean a 50% redundancy of the workforce resulting in a lower membership income for the unions. Terrible thought isn’t it.

As the ANC are inherently afraid of the unions, the former will eventually settle for a 7% increase and announce to the nation that all is well (and that customers must budget for a further 15% tariff increase next year on top of the 16% increase this year).
Here we see how the threat of mass looting, destruction of infrastructure and arson by union members, achieves results.

End of comments.

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